Do You Need a Beneficiary Review?


Posted on 18th July 2012 by Rita in Retirement and Estate Planning

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Who will receive your assets at the time of your death? We’re talking life insurance, annuities, retirement plan accounts and other assets. Did you know that contracts left to deceased individuals or ex-spouses is one of the most common beneficiary mistakes made? Another important note is beneficiary designations trump a will.

Reviewing the beneficiaries on your contracts is your assurance that many of your assets will be distributed according to your current wishes at your death. If your beneficiary designations are out of date, some assets may not be distributed in the way you intended. Therefore it is a good idea to do a beneficiary update regularly and especially if there have been any major life events, such as births, marriages, deaths or divorce since you purchased your policy(ies).

Benefits to a beneficiary review:

  • Pass assets tax efficiently.

  • Prevent financial devastation to heirs.

  • Ensure your assets are appropriately designated.

  • Prevent beneficiaries the emotional, costly and time consuming process of probate.

Assigning beneficiaries – Things to remember

  • Remove an ex-spouse after divorce.

  • Identify a new heir after the death of a primary beneficiary.

  • Name a secondary beneficiary – aka: contingent beneficiary.

  • Complete a separate beneficiary form for each plan/policy you own.

  • Update your beneficiary forms with new marriage, birth and adoption of children.

  • Be sure the asset custodian has the current version of your beneficiary designation form.

  • Consult an estate attorney before naming an estate as beneficiary. There may be disadvantages… Naming your Estate as Beneficiary.

Note: This blog is designed for general information purposes only. All information presented on this site should not be interpreted as legal advice and the author assumes no responsibility or liability for the actions taken or not taken by the readers based upon such information. For legal and tax advice contact your attorney or tax adviser.

Rita Sollie, Direct Insurance Representative with North Coast Life Insurance Company (NCL). No gimmicks or schemes here, just genuine and honest service. We don’t sell insurance, we solve problems. I welcome the opportunity to show you what NCL can do for your Life Insurance and Financial needs.
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