Beneficiary Designation Forms by Dan Leininger

Have you checked your “beneficiary designation forms” lately?

Now that we are approaching the end of the year, many people are in the planning mode, and thinking about getting all of their financial matters in order.  As you are reviewing your financial and estate plans, don’t forget to review your “beneficiary designation forms.”    Unfortunately, many overlook their “beneficiary designation forms” and forget to make sure that these forms are up to date and accurate.   With “beneficiary designation forms” I am referring to life insurance, annuities, and retirement plans (IRAs, 401ks, etc.).    When you take out a life insurance policy or set up an annuity or retirement plan, you are provided with “beneficiary designation forms.”  You specify on these forms the people to receive your life insurance, annuity, or retirement plan upon your death.  The insurance company issuing the life insurance, annuity, or holding the retirement plan must recognize the beneficiaries you designate on these forms as the owners of these accounts upon your death despite what your will or trust might say.  In other words, if there are different beneficiaries named on your “beneficiary designation forms” than named in your will or trust, the insurance, annuity, and retirement plan will only be paid to those named on the “beneficiary designation forms” on record with the company holding these accounts and not to the beneficiaries named in your will or trust.  Frequently, many years have passed since the life insurance or annuity was taken out or the retirement plan set up, and we forget who we named on these “beneficiary designation forms.”   Perhaps we named a spouse who is now deceased or even divorced as our primary beneficiary and we failed to name “secondary” or back up beneficiaries to them such as our children.  Perhaps something else has happened to the beneficiary named on a “beneficiary designation form” that now makes that person someone who should not receive the insurance, annuity, or retirement plan upon our death.  Perhaps, we failed to name any beneficiary at all.  Therefore, no review of financial and estate matters is complete until you have checked all “beneficiary designation forms” and made sure that these forms are up to date and accurate as to who you want to receive these accounts upon your death.