Have you purchased a new life insurance policy or annuity recently? When completing the section designating your beneficiaries, did you consider the impact on your estate plan? Beneficiary designations are independent of and trump directives in your estate plan documents. For example, if you intend to leave an equal amount of your wealth to your children and designate this in your will but name your daughter as your IRA beneficiary, you may significantly change the balance. You can avoid these problems in a few simple steps:
First, make a list of all your bank and investment accounts, retirement accounts (401k, IRAs, 403b), insurance policies and annuities. Contact the companies and ask for a copy of the current beneficiary or Transfer on Death designation. Do this even if the accounts or policies are old. Often these require changes to account for death, divorce and changes in children’s status. Ask for a change of beneficiary form while you are at it. Using a copy of the company file is preferable to your records since what is in the company files, will rule.
Now you can review the designations along with your estate documents and make sure they match your intents. You may want to consult with your financial planner and attorney to assure you are clear how the plans will work.
Finally, make any changes needed in your estate plans and beneficiary forms. If you are making changes, I recommend you consult your estate planning attorney to assure you do not accidentally cause a problem. You must use the change of beneficiary forms from each company. After the change is made, get a copy back for your files.
Don’t wait! You will feel better knowing you are accomplishing your goals and your heirs will thank you for having it all in one place.
Tags: Annuities, Beneficiary, Estate Planning, Insurance, IRA, Roth IRA
