In the financial world, a beneficiary is someone who has been designated to receive a distribution of your assets in the event the account holder passes. Beneficiaries are assigned for bank accounts, investment accounts, trusts, wills, and life insurance policies. Appointing a person to be a beneficiary is something that should not be taken lightly and can significantly affect the legacy that you leave behind.
Below are some of the Do’s and Don’ts of assigning beneficiaries.
.
Do’s
Update your beneficiary as life changes
As your family grows and relationships change, staying on top of your beneficiary selection may be the last thing on your mind. The best practice is as life changes you should always consider your beneficiary selection. Then determine if that selection still makes sense. At a minimum, review your beneficiaries at least once a year.
Completely fill out your beneficiary forms
If you are like most families, you can have names that are similar. You can have a loved one move to a different state or even change their last name. Completely filling out your beneficiary form can help you ensure your designation will receive the funds you intended for them to have. Make sure you accurately fill out their address, date of birth, social security number, and full legal name to limit confusion.
Let your benefactor know about their designation
It is a scary thing to let someone know that they can benefit from your passing, but not telling them can put the plans for your money in jeopardy. As a society, we do not talk about money. Even your best friend may not even know you have a special bank account just for them. Giving your beneficiaries a heads-up and providing the details can help the transition of your assets to the next generation.
Don’ts
Don’t assume your will supersedes your assigned beneficiary
Estate planning is a specialized field that is governed by laws that may or may not fit, in your mind, of what “Should” happen. You may have created a will, but there is a chance that who you assigned on your 401-k, 20 years ago, is still the same person. And the will you created three years ago may not supersede that designation.
Don’t limit yourself to just people
It’s a blessing to have a family you wish to assign as a beneficiary, but not everyone would like to give money to only individuals. There may be some causes or institutions you may want to support. When you think about leaving behind money think about the causes that keep you up at night or make you happy.
Don’t forget the community property laws in your state
Like a will does not always supersede a beneficiary, sometimes a beneficiary does not supersede the state laws that govern the probate of an individual’s assets. Based on the laws in your state, certain family members may have a claim to a portion of your assets.
Summary
With so many factors to consider, talking over your beneficiary designation with a financial advisor may be well worth your time.
Randall Avery
Financial Advisor │ Author │ Public Speaker
R.S.A. Deasil Advisors, LLC
Office: 531-333-2745
Email: Deasil@rsadeasil.com
Website: www.rsadeasil.com
P.S. If you would like me to speak at your next event, please click HERE
[sh_divider style=”shadow” shwidth=”wide” spacetop=”20px” spacebottom=”20px” totop=”disable” color=”rgba(0,0,0,0.15″][sh_divider style=”none” shwidth=”wide” spacetop=”1px” spacebottom=”1px” totop=”disable” color=”rgba(0,0,0,0.15″] [sh_columns number=”two-thirds”] [sh_column][sh_headerdouble size=”h4″]Hacking The System[/sh_headerdouble]
While working with clients, Randall realized there was a missing process that individuals were not performing when choosing to use their money. Motivated to fill this gap, Randall developed three models to ‘Hack The System’ and allow individuals to Create Your Own System (CYOS). Randall hopes effectively using these models will help individuals identify the best moral and ethical use of their money.
[sh_btn link=”https://www.amazon.com/dp/0999403508/ref=sr_1_1?ie=UTF8&qid=1515890889&sr=8-1&keywords=hacking+the+system+by+creating+your+own+system” target=”_blank” shape=”square” style=”dimension” size=”extralarge” color=”rgb(242, 148, 6)” bordercolor=”rgb(6, 6, 6)” bordersize=”0″ fontcolor=”rgb(245, 240, 240)” enablehover=”enable” enableicon=”enable” iconbg=”flat” iconset=”fontawesome” iconfa=” fa fa-cart-plus”] BUY NOW! [/sh_btn] [/sh_column] [sh_column]
