Its 11pm. Do You Know Who Your Beneficiaries Are-sayu-02

Personal-Finance Most people understand the importance of writing a will and buying enough life insurance to protect family from serious financial hardship upon their death. But one of the most overlooked aspects of financial planning is naming the beneficiaries for ones overall assets and investments, and keeping that list current. Recently we worked with a client who had named her husband as primary beneficiary on her IRA many years ago, but failed to update the account, even after he was admitted to a nursing home. Had we not recommended that she change the beneficiary to list her children, this would not have been on her radar and could have caused unnecessary hardship down the road. The problems with out-of-date beneficiaries and inheritances are further complicated today by the increases in divorce, having step-children, having spouses with Alzheimers or other illnesses preventing them from acting on their own accord, etc. Its no wonder that the Supreme Court has agreed to hear the case of a woman who is suing over her late fathers pension plan for benefits that she believes are rightfully hers. Her mother forfeited her rights to these benefits as part of a divorce settlement, yet was still listed as her ex-husbands sole beneficiary when he died. Mind you, retirement accounts such as IRAs and 401ks have a whole different set of rules than wills in terms of inheritances, postponing distribution and taxes, etc., but all the more reason to know the laws in your state and to be sure that you are protecting your heirs as opposed to creating further difficulties at a trying time. Case in point: Choose a second, just-in-case beneficiary to prevent probate issues and other complications if your primary beneficiary predeceases you. On the flip side of this issue, we know of cases where people have accidentally disinherited their heirs. How is this possible? The first mistake is an obvious one- not writing a will, thereby subjecting loved ones to dealing with the intestacy laws of the state in which the deceased was domiciled. A similar issue involves older wills that disinherit children after a parent remarries and then dies. If an estate has not been properly updated, everything will pass to the new spouse. Another common mistake is not adding children to the beneficiary list who were born after the will or estate planning was completed (think Anna Nicole Smith and Heath Ledger- two high profile tragedies where young children had no legal rights to inheritances). Finally, another cause of unintentional disinheritance is something called ademption. This occurs when money or property is bequeathed to an heir, but is no longer owned by the decedent because they sold or disposed of it before he or she died. Similarly, the designated beneficiaries may be up to date, but the policy may have lapsed. Be sure that the premiums on insurance policies are paid up. If we can remember to change the batteries in our smoke detectors every year, we should place as much importance on reviewing beneficiary designations every year. It is also important to consider changes after any major lifecycle event, such as marriages, births and adoptions, divorce, catastrophic illnesses and death. Mostly, remember that it is not only a will that should be reviewed annually, but insurance policies, retirement accounts and any payable-upon-death accounts. Consult with an estate planning attorney to learn more about your rights and responsibilities. About the Author: Lee Rosenberg is the Co-founder of ARS Financial Services, Inc., as a Certified Financial Planner of more than 34 years of solid financial expertise. Lee is a registered representative of Cadaret, Grant & Co., Inc and was named by rep magazine as one of the top 25 Independent financial advisers in the US. Article Published On: 相关的主题文章: