Articles - Archived Expert Advice

Beneficiary Updates

I recently lost my wife in a fatal car accident. I later learned she failed to update her designated beneficiary. As a result, the majority of her assets were passed to her ex-husband. What could have been done differently?

I am sorry to hear about your recent loss. Failure to update designated beneficiaries after a major life event (such as death, change in marital status or the addition of a child) is a common mistake. Regardless of your wife’s intentions, the beneficiary listed on her assets (insurance policies, retirement or deposit accounts) was the only legal recipient of the allotted benefit.

To answer your question, I am not sure what could have been done differently short of your wife updating her beneficiary designations since they override the will when it comes to transferring assets. Going forward, be sure to review your designated beneficiary forms at each financial institution after every major life event. If you decide to make a change, note that most institutions require the following beneficiary information: proper and legal name, date of birth, Social Security number and physical address. Again, beneficiaries can be updated at any time, and once they are updated, all previous beneficiaries are canceled and replaced.

Similar steps can be taken when updating those who are entitled to receive benefits from an insurance policy. These are known as contingent beneficiaries. Remember, your primary and contingent beneficiary can be held by an individual, group of individuals, your estate or an entity, such as a charity or corporation (some restrictions may apply based on the policy or account).

If you seek further assistance in this area, feel free to contact our trust officers at 877.367.5428. They will be happy to help you with your estate planning needs.