Have you Reviewed your Beneficiaries Lately?

Have You reviewed your beneficiaries lately?

That’s not something that you think of doing very often. 

For some it may be something they ever really think about.

So maybe it just not that important.

Anyway I am just too busy to take care of that right now, and I thought I was done with all my ‘housekeeping’ chores when I opened my financial accounts.

Reviewing my beneficiaries, it doesn’t seem like an urgent task anyway, my money will all go to the right place in the end. Or will it? 

Reviewing our beneficiaries is more important than we think.

Actually it is something that should be considered a top priority on all your current investments, insurance policies and financial accounts.

How can this make that much of a difference, maybe the question you are asking yourself?

Here is why it needs to take top priority on our ‘to do list’.

Beneficiary Designation supersedes one’s will.

If your beneficiary information is not current, when you pass away your assets will more than likely be distributed to an unintended heir?  As the beneficiary that you have listed can and does it most cases supersede even an up to date will.

Tax Related Benefits.

Not naming a beneficiary or naming your estate can be as equally bad, as by doing this you could be giving up some tax strategy rights as well as control.  Having beneficiary designations can help extend tax related benefits and reduce the tax burden on your beneficiaries.

Take the Time to Review your Beneficiary Details.

Life transitions can change everything for us.  Recently been married, divorced, had a new baby or even a death in your family since you originally opened your accounts or got that life insurance policy?  Well it is time to review and get updated your beneficiary designations.  By taking the time to do this you will be ensuring your wishes are carried out and you will be preventing your loved ones from the added stress that comes with the legal complications at your time of death if not done.

It should not be one of those job’s you will get to later, call your advisor today, don’t be in doubt make sure you take care of this vitally important issue and give yourself the gift of peace of mind that your family will be taken care of in the event of your death.

Kids as Direct Beneficiaries! Is not a good Idea!

 When you buy a life insurance policy it is usually to protect and provide for your family after you die. So it seems to make sense to designate your children as beneficiaries , but this can have complications if you were to die while your children are still minors.

For the protection of minor children they cannot receive or control proceeds from assets until the age of 18 in most states. In such cases insurance companies can keep the funds until they reach 18. Eventually they will get the money, but do you know how a 18 year old would handle all that money? This is not how people intend for their children to benefit from life insurance!

So if not children as beneficiaries then what about the next most popular choice a Guardian for your minor children? This to can be a bad idea as here you are creating a moral obligation that the Guardian will use all the funds for the benefit of your children. Another problem that can be created by doing this is what if this person is incompetent at the time of your death ?

On the other hand if you create a Revocable Trust you can control when your children receive their inheritance. The insured establishes the Trust, chooses a Trustee and dictates under what terms the assets in the trust can be used therefore insuring the proceeds from a life insurance policy can be used for the benefit of your minor children.

You should always think twice before naming beneficiaries on your assets , if you have already don’t worry it is an easy fix! Do it right create a personalized Revocable Trust this will allow you to pass your financial assets to your family in the way that you intended and help you preserve your family values and family legacy.