We first shared this story back in 2011. Nothing has changed much since then as far as the need to be careful when designating beneficiaries. Please read the article then give us a call.
Whatis the quickest way to un-do an otherwise carefully planned estate?
Opena bank account, brokerage or retirement account.
Why?Because the beneficiary designations on these accounts override your will. Yes,itâ€™s true â€“ the beneficiary designation is the estate planning trump card. Andmany an estate plan has come undone because of carelessly named beneficiaries.
The Wall StreetJournallast week issued a warning in an article entitled Beware the Beneficiary Form.
â€œPeople donâ€™trealize the importance of this,â€ says Martin Shenkman, an estate planninglawyer in Paramus, NJ. A carelessly named beneficiary on a financial accountcan cause a loved one to be disinherited, a disabled child to lose governmentbenefits, and heirs to be slapped with a big tax bill.
The Journal also offers afew tips to protect you from this type of estate plan destruction, to include:
Know what kindsof accounts have beneficiary designations. Did you know that U.S. Savingsbonds have a beneficiary form? Other accounts for which you may have named abeneficiary include retirement accounts, life insurance policies, bankaccounts, certificates of deposit, stocks, bonds and mutual funds.
Review yourbeneficiary designations regularly and certainly after any life-changingevent such as a marriage, divorce, birth or death of a loved one. Also,job-changers and retirees take note: Beneficiary designations on retirementplans donâ€™t carry over when you roll a 401(k) to a new employerâ€™s plan or to anIRA, or when you convert a regular IRA to a Roth IRA.
AtIdaho Estate Planning we educate our clients on the proper procedures fornaming beneficiaries. Our Life Planâ„¢ Members also participate in a yearlyreview of the assets contained in their estate plan and any changes madethrough the previous year. If you have been considering putting your estateplan together, we have the experience and expertise to help you maintain youroptions and protect yourself as well as your loved ones now and into thefuture. The best time to plan is always now! Remember, goodplanning is no accident!