Beneficiary designations are important because they determine who will receive the assets of a person’s estate in the event of their death. These designations are typically made when opening a life insurance policy, opening a retirement account (such as an IRA or 401(k)), or purchasing annuities. Here are 10 reasons why beneficiary designations should be reviewed regularly:
1. Changes in personal circumstances: Beneficiary designations should be reviewed regularly as personal circumstances can change over time, such as getting divorced, having children, or experiencing a change in a relationship with the intended beneficiary.
2. Changes in the law: Changes in the law can also affect beneficiary designations, so it is important to review them regularly to ensure that they are still in compliance with current laws.
3. Avoiding unintended beneficiaries: Reviewing beneficiary designations regularly can help to ensure that assets are distributed to the intended beneficiaries and avoid unintended beneficiaries from receiving assets.
4. Reviewing multiple accounts: People may have multiple accounts with different beneficiaries, and it is important to review and update them all to ensure that assets will be distributed as intended.
5. To ensure that the assets are going to the right person: Reviewing beneficiary designations regularly can ensure that the assets are going to the right person, and avoid disputes or legal battles among family members.
6. Avoiding probate: Beneficiary designations can help to avoid probate, which can be a time-consuming and costly process, but only if they are updated and accurate.
7. To reflect current wishes and priorities: Reviewing beneficiary designations regularly can ensure that they reflect current wishes and priorities, and that they align with any changes in the individual’s financial and personal situation.
8. To update beneficiaries if the original ones are deceased or incapacitated: Reviewing beneficiary designations regularly can ensure that the assets will go to the intended person, in case the original beneficiaries are deceased or incapacitated.
9. To update beneficiaries in case the owner of the assets has new heirs: Reviewing beneficiary designations regularly can ensure that new heirs are added and assets will go to the right people after the death of the original owner.
10. To ensure that the assets will be distributed according to state laws: Reviewing beneficiary designations regularly can ensure that the assets will be distributed according to state laws, and avoid any legal disputes or complications.
It is important to review beneficiary designations regularly, especially when experiencing significant life events or changes in personal circumstances. It is also important to consult with legal and financial professionals to ensure that your beneficiary designations are accurate and up to date.
Disclosure: Inclinevest is a Registered Investment Advisor in the state of Colorado and other jurisdictions where permitted. This communication is for informational purposes only and should not be construed as legal, accounting, and/or tax advice. Should you have any questions and/or issues in these areas, please consult your legal, tax, and/or accounting adviser. Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money. All views, expressions, and opinions included in this communication are subject to change. This communication is not intended as an offer or solicitation to buy, hold or sell any financial instrument or investment advisory services.