Check your Beneficiaries! (04/14/2015)

An expression people repeat over and over is “the one constant is change”. In our business, we are often consulted as a result of changes such as a new job, marriage, divorce, death, and relocation. In the past few months, I have seen several cases in which, amidst these changes, beneficiaries were not updated or changed on accounts, and the result was detrimental.

If you have a retirement account such as a 401(k), 403(b), IRA, Roth, pension, annuity or a life insurance policy, you are given the opportunity to name a beneficiary or multiple beneficiaries on your account. If you have a nonretirement account, you do not name a beneficiary but you can create a Transfer on Death (TOD) registration, which essentially names who will own the account upon your death.

We had one case recently in which a retiree was checking on a 401(k) account that he had left behind with the custodian when he retired. Although he had designated his wife as beneficiary several years ago, they did not have this recorded. His estate would have received the benefits if something happened to him, and his spouse would have gone through probate unnecessarily.

We have seen many cases in divorces where the ex-spouse remains beneficiary even when that is not the intention. In other situations, decisions made earlier in life have radically changed, but without the updated designation, the old choices remain. For future peace of mind, as changes happen in your life, make an effort to check your accounts periodically!

Lisa Dugan

posted Tuesday, April 14, 2015 2:30 PM