Many assets bypass your will or trust and go directly to beneficiaries through designated accounts like IRAs, retirement plans, life insurance policies, and certain bank accounts. If you're not careful with these designations, your assets might not be distributed as you intended, potentially creating family conflicts.
3 Essential Steps for Beneficiary Designations
1. Name both primary and contingent beneficiaries. Without a backup beneficiary, if your primary beneficiary dies before you, the asset goes to your estate and loses creditor protections. Always designate contingent beneficiaries and avoid naming your estate.
2. Review and update regularly. Life changes—divorce, death, births—require updated beneficiary designations. Don't leave assets to an ex-spouse or create complications by naming minors without proper planning. Consider establishing trusts when appropriate.
3. Consider government benefits. Naming a disabled loved one as beneficiary could disqualify them from Medicaid or other benefits. A special needs trust may be a better option.
Avoid Costly Mistakes
Outdated or vague beneficiary designations can force assets through probate, increasing costs and delays while creating family stress during difficult times.
Regular review of your beneficiary designations ensures your assets go where you intend, prevents disputes, and protects your family from financial complications.
Ready to review your estate plan and beneficiary designations? Contact SD Mayer & Associates today—we'll help you navigate these important decisions and ensure your financial legacy aligns with your wishes.