Test Your Knowledge About Beneficiary Designations
While most middle-aged or older adults know about the role of wills and trusts in estate planning, they may not have really considered the importance of other beneficiary designations, which can actually transfer many valuable assets. For example, the will may provide that your heirs be treated equally, but what happens if a life insurance policy or retirement plan designation has conflicting beneficiary designations? The results can be far from what you actually intended and cause problems for your beneficiaries, including your family, friends and favorite charities.
A will or trust only controls certain assets not otherwise provided for, and in recent years, many, if not most, financial assets can have named beneficiaries. Here is a short list of some of the assets that many people own that can provide beneficiary designations:
· Life insurance (both term and whole life).
· Many annuity contracts (both charitable and commercial).
· Retirement plans (IRA, 401(k), 403(b) and others).
· Bank accounts with pay on death (POD) provisions.
· Investment accounts with transfer on death (TOD) provisions.
Normally, when these accounts or contracts are established, it is possible for you to name primary and/or secondary beneficiaries. Often, the beneficiary designation process is almost an afterthought that is completed spontaneously, usually including a spouse or children and perhaps close friends or charitable interests, and then, the documents are filed away and collect dust for years or decades without a second thought.
However, as time marches on, beneficiary designations are rarely altered even though marital status may change, people move, friends and interests change and so on.
Consider a life insurance policy or retirement plan that named certain primary or successor beneficiaries many years ago, and now those people may be deceased! As jobs change and people move, some valuable assets become lost in the process too. Paid-up insurance policies, employer retirement accounts, even bank or financial accounts may become lost over the years.
Test your beneficiary knowledge
Check all that apply.
☐ I have a will or trust as my primary estate plan.
☐ I review all of my beneficiary designations every year or two.
☐ I have a complete list of all of my accounts and contracts with beneficiary designations.
☐ I keep a copy of this list along with my current will, trust and other estate plans.
☐ I have discussed my estate, financial and legacy plans with my beneficiaries.
☐ I have never changed my plans in the past but may do so in the future.
☐ In addition to my loved ones or very close friends, I have or may consider including provisions for my favorite charities.
☐ I understand that if I do not periodically review plans, my wishes in the future may not be carried out.
Your wishes are an important part of your lasting legacy and can and should be reviewed on a regular basis to make sure that they are in harmony with your overall plans and circumstances. As you review this checklist, you may discover that now is the time to consider other beneficiary arrangements. If so, you may want to use the worksheet below to help you with this process
My Beneficiary Review List
| Type of Plan | Who Are Named | Estimated Benefit | Date Reviewed and Location |
The time spent completing and saving can provide you with peace of mind that your wishes will be carried out for the people and charities that you wish to provide with a legacy gift.
Contact our Executive Director Forrest Higgins, with questions!
Boys and Girls Clubs of East County Foundation
619-440-1600×301
Contact Us
If you have already included us in your plans, please consider letting us know so we can acknowledge you. Our Executive Director, Forrest Higgins, can be reached at 619-440-1600×301 or forrest@bgcec.org; thank you!