No one enjoys filling out forms, so the unpleasant task is often delayed indefinitely. But sound financial planning involves reviewing decisions on a regular basis and updating forms as necessary. In order to ensure that the right people inherit your assets when you pass away, you should review your beneficiary forms every few years, and especially when one of the following situations occurs.
You can’t remember whom you named as beneficiary. If you filled out your beneficiary designation forms many years ago, you might not even remember whom you named to inherit your assets. If that’s the case, it’s worth your time to at least review your forms, to be sure the correct person is named.
Your intended beneficiary has changed. Numerous life changes can make a change of beneficiary necessary. If you’ve divorced, you might not wish for your former spouse to inherit your assets. This can be particularly true if you’ve remarried. Other situations, like the addition of new family members or someone becoming disabled, might also alter your wishes.
You might have even decided to leave some assets to a favorite charity. If that’s the case, talk to an estate planning attorney about how to transfer those funds.
You want to help your loved ones avoid delays. When beneficiaries are not named, or when a death or divorce has occurred in the meantime, assets can become hung up in probate court. This process can delay distribution of your funds for months or even years due to legal challenges. Naming the appropriate beneficiary ensures that your assets pass quickly to them after your death.
You need to name a contingent beneficiary. It’s usually a good idea to name back-up, or contingent, beneficiaries. If your first choice dies before you or becomes incapacitated, another appropriate beneficiary will receive the funds.
It might be time to review your estate plan with an appropriate attorney. But in the meantime, schedule an appointment with us to discuss your assets, so that we can help you understand the impacts that various decisions can have upon your family’s future.