Keeping your beneficiaries up to date on your IRAs, 401ks, Insurance Plans, etc., sounds simple, but it’s often the most over looked aspect of estate planning. Generally, significant life changes can create a season of busyness, and updating who or whom your assets will pass on to can slip by the wayside, creating unintended consequences. For example, let’s say that when you were single you had listed a sibling as a beneficiary on your 401k. You have since married and written a will with your spouse as the sole beneficiary of your estate. However, your 401k beneficiary remains your sibling, meaning that upon your passing, your 401k will go to your sibling and not your spouse! Even though your spouse is listed as your sole beneficiary in your will, beneficiaries on IRAs, 401ks, and Insurance plans supersede your will.
A quick review of your beneficiary designations can prevent situations like the one above from occurring. Make sure that your beneficiaries’ information is current, including their name, social security number, and address. It’s also a good idea to name contingent beneficiaries in the rare event that there aren’t any surviving primary beneficiaries.
While most of us naturally shy away from discussing death, it’s important for you and your family to have peace of mind with regards to your estate planning. By spending a little time keeping your beneficiary designations up to date, you can rest assured that your family will be properly taken care of.