2015 Update-Let’s Talk About Your Beneficiary Designations!
Certain of your assets currently are probably in financial institutions and you at one time completed beneficiary forms – forms that designate who will be the beneficiary of those assets in the event of your death.
If your financial institution (where you have filed beneficiary designations) has experienced a merger with another financial institution, it is advisable to complete new beneficiary forms. Why? Because, during a merger, anything can happen! That will also be a good opportunity to review/revise the “old” beneficiary information and make sure everything is current.
Also, life has a way of changing and those changes can affect beneficiary designations. Let’s take a simplified case “story”:
“Decades ago, Mary and Joe married and had two children, Amy and Bill. Amy got married and then Bill got married. Amy and her spouse have two children; Bill and his spouse have two children. Thus…happily, Mary and Joe have four grandchildren, whom they love and want to treat equally!
As part of their estate, Mary and Joe decided to have Amy and Bill as equal beneficiaries on retirement plans/accounts. Mary and Joe completed the appropriate beneficiary forms. Sadly, Bill died in an accident. Mary and Joe did nothing about the original beneficiary designations. A very real possibility is that – upon the death of Mary and Joe, their son Bill’s children could be disinherited, they would not receive any money from Mary and Joe’s retirement plan. This was certainly not the intention of the grandparents, but Mary and Joe had failed to review their beneficiary designations after Bill’s death.”
This is an extremely simplified example, but does highlight the importance of periodically reviewing beneficiary forms.
In many cases, estate planning attorneys experience situations where an ex-spouse or even a deceased individual has unintentionally remained on a beneficiary designation form, with unforeseen results to the estate.
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