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Beneficiary Designations Trump Your Will

Review Beneficiary Designations On Insurance And Retirement Accounts

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When is the last time you checked to see who you named as the beneficiary, or beneficiaries, on your retirement accounts, life insurance policies and annuities?

Why Review Beneficiary Designations?

Many people neglect to update their beneficiary designations after a marriage, divorce or other change in their family situation. The problem with this; the beneficiary designation is a legally binding document so regardless of your current relationship status, the asset will go to the person you named in the beneficiary designation whenever you last updated it.

Beneficiary Designations Trump The Will

Your will or trust will not override what is named in the beneficiary designation on a life insurance policy, annuity, or retirement account (like an IRA or 401k plan). The beneficiary designation takes precedence, or as one poker player put it "the beneficiary designation trumps the will".

For this reason, it is important you update your beneficiary designations to reflect your current wishes.

How To Review Beneficiary Designations

Make a list of each retirement account, life insurance policy and annuity that you have. Add two columns to your list; one for the beneficiary and one for a date. For each account or policy write down the beneficiary and the date it was last updated.

Keep this list in a binder or file folder along with your other important documents. Regardless of any changes, make it a habit to pull this binder out once a year and review the information in it.

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