It’s important to keep your beneficiary designations up-to-date. Failure to do so before a major life event occurs (such as death, change in marital status or the addition of a child) is a common mistake. When you pass, regardless of your intentions, the beneficiaries listed on your assets (insurance policies, retirement or deposit accounts) are the only legal recipients of the assets.
What to do now
Update designated beneficiary forms for each policy and account that requires changes 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. You can update your beneficiaries at any time, and once they are updated, all previous beneficiaries are canceled and replaced.
Update insurance policies
You can take similar steps when updating those who you want to receive benefits from any insurance policies you own. These are known as primary and contingent beneficiaries. Remember, your primary and contingent beneficiary designations 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).
Avoid adding to your loved ones’ emotional grief with financial misunderstandings. Be sure to keep your beneficiary designations current.
Article provided by Local Government Federal Credit Union.
Contact an estate planning attorney for additional guidance.