Update Beneficiary Designations Now

One of the most important estate planning moves that you can make right now is to update your beneficiary designations for your bank accounts, brokerage firm accounts, life insurance policies, annuities, tax-favored retirement accounts, and company benefit plans.

Significant events in your life such as divorces or changes in the disposition of property that you would like to leave to specific children spur the need for updates. One of the common horror stories is when individuals die after a divorce without changing the beneficiary from their ex-spouse to another desired beneficiary. Even if the will says differently, the money goes to whomever is named on your most recent beneficiary form. It takes little time to update these beneficiary forms, so it is beneficial to make a habit of annually revisiting them to be sure that beneficiaries are appropriately designated.

See Bill Bischoff, Make This Estate Planning Move Now: Failure to Take This Action Can Have Dire Consequences, Smart Money, Aug. 9, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.