2nd Feb 2017
Ensuring that all your designated beneficiary details information is complete and accurate is one of the most commonly overlooked details of a comparative estate plan. It is critical that this improvement is as accurate and up-to-date as possible as this can prevent any arguments and discoveries in the future in the event of your passing.
This involves making sure that all your important documents including retirement accounts and insurance policies are current and include the correct designations. This includes but is not limited to: 401ks, 457s, 403s and IRAs. It is quite common to forget to update your beneficiaries barring such events as birth, divorce or death of a beneficiary. You should check and update your beneficiary information on all your retirement accounts insurance information yearly.
This is especially critical today, where so many banking agencies and companies are merging or being taken over. Your beneficiary and other important information could thus get lost or accidentally changed or omitted in the process of the merger or buy-out.
For those with an in-depth or complex insurance plan or trusts, it is imperative to properly and accurately designate your beneficiary. If you have the correct documentation, your property and assets can easily be transferred to your loved ones. However, if the information is not relevant and current, it could make the process extremely drawn out and complicated and the matter could end up costing a great deal of time and money and be held up in the court system.
Additionally, you need to make sure that you have designated the correct beneficiaries. In order to do so, you should consult with your estate planning attorney. They can provide you with insights into how to select the proper beneficiary. In the event you have selected the wrong beneficiary for your retirement account, for example, this could have devastating effects on situations such as income taxes in the event of your demise.
In addition, the act of naming a mirror as a beneficiary is another common error when choosing a contingent or primary beneficiary for a life insurance policy. A minor is not able to directly collect or hold the designated funds. Hence in this situation the insurance company will take hold of the benefits until the court is able to appoint a legal guardian, which takes a long time as well as an enormous added expense.
In the event of divorce, if your policy is not current, your settlement could inadvertently go to your ex-spouse rather than your children. This can also apply for the case of second marriages etc., wherein as if the beneficiary information is not current, the first spouse may end up with funds and property that were in fact entitled to the current spouse. .
If you have any questions about how to choose the proper beneficiary for either your retirement plan or life insurance policy, feel free to contact Tompkins Law at 1-714-385-0044. We can assist you with any questions or concerns you may have regarding your retirement, insurance or state plans. These decisions are important and should not be entered lightly. You can count on our expert legal advice to help you with this major life decision.