Monday, June 20, 2016

Why Beneficiary Designations are important

"Beneficiary designations" transfer property to beneficiaries after the owner is deceased.  They are used for bank accounts, investments, insurance policies and the like.

Often people fill them out once, then forget about them.  They may not update them for years, or ever.

However, life goes on. Divorce, death of a beneficiary, estrangement of family members, children growing up, aging of parents and changing financial circumstances of any of the involved parties may lead the owner of the asset to make a different choice than s/he would have previously.  For instance, it is unlikely that someone would want to leave such an asset to his or her ex-spouse, but that could be exactly what happens if care is not taken to update the designation.

We recommend that our clients review all of their beneficiary designations once a year. Remember that any property that passed to your loved ones through beneficiary designations after you die generally does not have to go through the probate court.

Your estate planning attorney can help you further.

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