Beneficiary Designations – Do Not Let Them Disrupt Your Estate Plan
Beneficiary designations can be an important part of the estate planning process. A significant portion of your assets may be controlled by beneficiary designations. Some of it may be in retirement plans while a substantial portion may be controlled by beneficiary designations in life insurance policies. Some of the assets may be in financial accounts that have a beneficiary designation or “Transfer on Death” (“TOD“) or “Pay on Death” (“POD”) designation.
The important thing to remember is that beneficiary designations need to be reviewed and possibly updated periodically. Things change. Circumstances change. Lives change. You may have new beneficiaries. A beneficiary may have died, gotten married or divorced or there may be some other reason why a named beneficiary needs to be changed.
In sum, beneficiary designations are exceedingly important. A large portion of one’s wealth is controlled by beneficiary designations. Many of these designations may be long-forgotten. One may have made a designation early in life and it may not have been updated. Sometimes, a state statute may step in to save the day. Other times, it may not. So make sure your beneficiary designations are up-to-date.
~ Mark S. Harris