Have You Updated Your Beneficiaries Lately?
Any time you possess a financial account or asset, you will be asked to fill out a beneficiary form. But after completing the form, you might not think of it ever again. That could potentially be a mistake, because a number of things can change over the years.
Why naming a beneficiary is important.
If you pass away without naming beneficiaries, or if your beneficiaries die before you do, that account will be subject to the probate court process. Instead of passing directly to the person of your choice, the asset will be tied up in court for months or years, and inheritance can even be challenged.
And if your intended beneficiary needs the money quickly, this situation could cause hardship for them as well.
Who can be named as a beneficiary? A few states require that you name your spouse. But in most places, you can designate anyone that you want. Spouses and children are common choices of beneficiaries. But you can even name a favorite charitable organization.
If you want to designate someone who is not yet an adult, or who otherwise can’t manage their financial decisions, contact an estate planning attorney about more complex legal maneuvers to protect their interests.
Why should you update beneficiaries regularly?
A number of things can happen over the years that change your wishes regarding your assets. A divorce or remarriage usually necessitates a change of beneficiary. Or if your beneficiary dies, or becomes unable to manage their own affairs, you might need to select someone else. The birth of new children or grandchildren might also impact your decisions.
If you don’t make these changes, the wrong person will inherit your assets. And if they’ve passed away before you, a probate court will be responsible for making the decision.
Beneficiaries should be updated as needs change, or every few years just to be sure. If you haven’t addressed this important financial planning step lately, give us a call to discuss the next steps.

