Have You Checked your Beneficiaries Lately? (0014)
There are three phases to your financial journey. First is the accumulation phase, where you are building your wealth. Second is the distribution phase, where your wealth supports your retirement. The final phase (often overlooked) is the legacy phase, where your wealth can bless those you leave behind.
As a financial advisor, I've seen the heartbreak and frustration when a family has overlooked one minor detail in the legacy phase, beneficiaries. It's a simple process that is often overlooked and forgotten, leaving your family in disarray.
Here are five reasons to check or re-check your beneficiaries today!
1. Make it Clear
Although many assume a spouse or Executor will distribute your assets according to your wishes, there are times that emotions can cloud judgment. Don't leave it to chance. Don't expect your spouse or Executor to read your mind after you are gone.
2. Simplify the Probate Process
Probate is the process of administering a deceased person's will. It can be a complicated and lengthy process. Your assets can be tied up in probate, creating additional confusion and anxiety for your family members. Having your beneficiaries clearly identified on all your accounts can simplify and shorten the entire process.
3. Things Have Changed
As life changes, beneficiaries can change also. Your designations at age 60 may differ radically from those at age 40. A best practice is not to set it and forget it. An annual check is always a good idea. Naming a beneficiary may be just as much about avoiding the money going to someone you don't want as it is to those you do want to have it.
4. Beneficiaries Trump Your Will
Our will provides a roadmap, but an executor will rely on your beneficiary designations before following what's written in your will. Bottom line, beneficiaries always trump your will.
5. Avoid Family Conflict
Making sure your beneficiaries are named and up to date on all your accounts will prevent family members from questioning which assets were intended for whom. Also, you can designate percentages of an asset to ensure clarity about how much is distributed to each person.
Bottom line, this small but important legacy step of updating your beneficiary designations can save time, money, and prevent confusion after your death.
If you haven't thought about your designations in some time, please click this link, and let's schedule some time to review.