When was the last time you checked the beneficiary designations on your retirement and other investment accounts? When you sign up for a 401(k) or any other bank or investment account, you are asked to name a beneficiary who will receive the money in the account when you pass away. Many people fill out the form and forget who is listed as a beneficiary on an account. Some people even leave the beneficiary designation blank when they open an account.
Although many people make sure that important documents like wills are updated when necessary, they often overlook beneficiary designations on financial accounts. If it has been awhile since you checked, you may find that your designated beneficiary is not who you think it should be. For example, if you named a charity as your beneficiary many years ago, that charity may no longer exist. If you’re divorced, your ex-spouse may still be listed as a beneficiary. If you didn’t choose a beneficiary or your named beneficiary has passed away, your beneficiary may be determined by federal or state law or by the plan document that governs your retirement accounts. Whatever your beneficiary statement says will trump your will.
Fortunately, changing your beneficiary isn’t hard to do. If you do not remember who you’ve chosen as a beneficiary, you can request a copy of your beneficiary forms from your financial institution. You can revoke your beneficiary designation and choose a new beneficiary with a change of beneficiary form. You can also add beneficiaries. If you change or add beneficiaries, make sure that your account administrator has received the form. Beneficiary designations are only effective if they are received by the account administrator before the account owner dies.
You should check your estate plan periodically, including your will, power of attorney documents, and any beneficiary designations. You should also check these documents after major life events, like marriage or divorce. If you have any questions about your beneficiary designation, you should contact your financial institution. If you have questions about any other documents in your estate plan, you should contact an estate planning attorney.
To find an estate planning attorney near you, you can contact the State Bar of Wisconsin's Lawyer Referral and Information Service at (800) 362-9082 or search online here: https://www.wisbar.org/forPublic/INeedaLawyer/Pages/Lawyer-Referral-Request.aspx
Article reprinted with permission from the Greater Wisconsin Agency on Aging Resources Legal Services
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