Are Your Beneficiaries Up to Date?

An elderly couple sitting with a financial advisor, discussing and signing documents.

Beneficiaries come into play when thinking about who your assets will go to–things such as money in the bank, retirement accounts, investments, and life insurance policies. Put simply; a beneficiary is the person (or people) you name to inherit what you leave behind. So how do you choose the proper beneficiary, and what does the designation entail? Here are some helpful tips:

  • As you consider a beneficiary, ask yourself: Does anyone depend on you financially? Are you married? Do you have children?  
  • Keep in mind that for some assets, there are two types of beneficiaries: primary and contingent. A primary beneficiary is the person first in line to receive the benefit. A contingent beneficiary serves as a backup should your primary beneficiary pass before or at the same time as you. 
  • Children under age 18 can be primary or contingent beneficiaries. However, if you pass while they are minors, your assets will transfer to the guardian of the minor child’s estate.
  • If you need to change your beneficiary following divorce, remarriage, or after the death of a loved one, you can. Just contact your employer, financial professional, or financial services company, depending on the asset type. 
  • If you don’t designate (or update) beneficiaries, it may be unclear who inherits your assets, forcing family into a lengthy, expensive, and tiresome probate process.
  • You don’t have to name a person as a beneficiary – many wills and trusts name charities or organizations as beneficiaries.
  • Beneficiaries pay nothing to the executor or anyone else to receive their inheritance from the estate.

Let us know if you would like to discuss your asset and estate planning further.  We can guide you through these important decisions.

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