After a major life event such as the birth of a child or a divorce, it is important to revisit your estate plan, including wills, trusts, and beneficiary designations.
Too often, a former spouse will be left on inadvertently by the account owner. This naturally creates a problem upon death, when the former spouse receives the benefit. Carefully review your employer’s rules for changing a beneficiary and keep the following in mind:
- You can usually change your beneficiary online by logging into your account
- If you find it difficult to change your beneficiary online, contact the institution or your financial advisor.
- Be careful if naming a minor as your beneficiary, as the minor would end up in probate court. Establishing a trust can help prevent your heirs having to go to probate court.
- On 401(k)s, IRAs, insurance policies and annuities, be sure to designate contingent or alternate beneficiaries in case the primary beneficiary dies first. This would also end up in probate court.
- You can’t bypass a beneficiary designation of a 401(k), IRA, insurance policy or annuity by altering it in a will. You will need to go directly to the financial institution.
Everyone should have an estate plan, particularly if property or investment accounts are involved. If you need help setting one up or have questions about what type is right for you, contact us using the convenient form to the right.