Tips on Beneficiary Designations

I thought we could switch gears a bit this week, and I could provide you folks with a couple of general tips on Beneficiary Designations. Beneficiary Designations are often overlooked in estate planning discussions. The reason why they are overlooked is because some estate planning professionals focus more on the instruments (i.e. trusts, wills, powers of attorney, etc). That being stated, properly drafted Beneficiary Designations can play an important part in your planning.

Let me give you an example I recently shared on a radio show. Ex. Mom and Dad have a insurance policies that name them as the primary beneficiary, and nobody as the secondary beneficiary. Why? Nobody is named as the secondary beneficiary because they have minor children, and somebody told them that they shouldn't name their child as a beneficiary. In this case, a Trust or Trustee rather, of a Trust set up for a minor child or minor children would be a great beneficiary…if the designation is drafted properly, and it is going to the proper trust.

So, here are some tips when it comes to beneficiary designations:

  1. Keep them updated – this means asking for a copy from your financial services representative; your advisor most likely filed your beneficiary designation, but you want to make sure when they sent it to Corporate, that it wasn't lost in the meantime.
  2. Coordinate them with your Estate Plan – don't forget that these assets (e.g. life insurance policies, IRAs, 401(k)s, etc.) may be a very large part of your estate. Just because they may not go through probate, does not mean they should be filed and forgotten. Your estate plan should reflect your wishes when it comes to distribution of your entire estate…not just the assets that are going into your living trust or are passing via your Will
  3. Have your Estate Planning Attorney look over your Beneficiary Designations – what if your spouse wants to disclaim assets for tax purposes…is this included in your beneficiary designation? What if you want to protect certain assets from being lost to remarriage of your spouse after you are gone…does your beneficiary designation reflect this?

I hope this is helpful for you all. If you would like me to take a look at your beneficiary designations or if you have questions about this topic and/or your estate planning, feel free to contact my office to set up a complimentary consultation. You can get our contact information on my website here.

Categories: Estate Planning