Pay Attention to Beneficiary Designations

One of the most common mistakes in estate planning is failing to pay attention to beneficiary designations on life insurance policies, IRAs and 401(k) plans.


You may not accurately recall who you named as beneficiary or previous designations may be no longer reflect your wishes due to changed family circumstances. Have you taken your ex-spouse off of your retirement plan and life insurance beneficiary designations?


Do not designate minor children as beneficiaries (even as contingent beneficiaries), because they may inherit the assets at age 18. (Way too young!). Instead, pass the assets into a retirement benefits trust to be held until the beneficiaries have reached a level of maturity sufficient to handle the funds.


As a general practice, it's a good idea to circle back with your life insurance company and retirement plan administrator every 3 or 4 years to obtain a written confirmation of your designated beneficiaries.


See also: The Effect of Divorce on Life Insurance Beneficiary Designations


Attorney Adler focuses his practice on estate planning, wills, trusts and estates. He can be reached at 212-843-4059 or 646-946-8327.





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