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Have You Reviewed Your Beneficiary Designations?
November 5, 2019 at 9:00 AM
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Certain assets like retirement plans and life insurance policies must have beneficiary designations. They do not pass according to your Will, Revocable Living Trust or estate plan in general. Given that these are often the largest assets a person owns (other than a home) it is critical to verify what the designations say and whether they still make sense. Is an aging parent named that was never updated to spouse? Is a sibling named that was never updated to spouse or children? Are minor children named? Is an ex-spouse named? Each of these present serious pitfalls that cannot be fixed once you die. It pays to get clear on who should inherit, and why and how (e.g., with trusts for minor children) then update them ASAP. Also, be sure you name contingent beneficiaries not just primary beneficiaries so assets don’t default to your estate. This small detail has huge consequences – for example, disallowing the valuable tax deferred stretch IRA to children if an estate is named or subjecting life insurance to estate creditors such as large medical bills if an estate is named. We review your beneficiary designations as part of our estate planning consultations and can advise on optimal designations and updates.

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