Thinking about your future means much more than considering what job you want, where you want to live, how many children you will have, where you want to go on vacation and when you will retire. While the information collected from these questions can be helpful when taking steps to protect your future, and estate plan requires an individual to look much deeper at the details of his or her life. Although many residents in California and other states associate estate planning with elderly people, this is a misconception. Additionally, a person does not need to be wealthy to enjoy the benefits of an estate plan.
Regardless of a person's age or income, when it comes to estate planning, there is one very important step that everyone should take. Whether your wills, trusts and other estate planning documents were drafted a year ago or decades ago, it is important to continually check on your beneficiary designations. This includes accounts such as life insurance policies, back accounts, brokerage firm accounts, retirement accounts and other similar accounts.
Experts suggest that turning in proper forms to designate property and assets to beneficiaries is so important that it should be completed immediately. Additionally, these designations should continually be looked at and updated. Because the failure to timely complete these steps can be dire, it is also important to understand what could happen if an individual fails to timely take these simple steps.
For example, if an individual has stepchildren and fails to designate them as a beneficiary, they will not receive any benefits from your estate plan. Another unfortunate consequence for not updating beneficiaries could result in an ex-spouse enjoying benefits because he or she is stilled named as a beneficiary. Additionally, in cases of divorce, a divorce agreement could be trumped by an out-of-date beneficiary designation, even if a recent divorce agreement attempts to change this designation.
So the moral of the story is that whether you have experienced a life event or change that requires a beneficiary designation to be updating, this process should be routinely completed. This could help avoid any upsetting results in the event of your incapacitation or death.
Source: Marketwatch.com, "Make this estate planning move right now: Check your beneficiary designations," Bill Bischoff, June 30, 2017