Why you should make sure to name a beneficiary

On Behalf of | Jan 19, 2021 | Estate Planning | 0 comments

If you have an annuity or a life insurance policy, you likely have heard of beneficiary designations. A beneficiary designation reduces the costs and time that would be used in the probate process. In Oregon, many assets pass through beneficiary designations rather than through a will.

You may find it useful to know that you can easily change or update your beneficiary designation.

The basics of beneficiary designations

When creating an estate plan, the primary beneficiaries may include family members, trusts and charities. This is who will receive assets like IRAs and life insurance benefits upon your death.

If the beneficiary of your estate requires special needs, consider their government benefits. Additionally, you should consider the mental health of the beneficiary. To set aside proper provisions for your heirs, consult with an estate planning professional.

Why name a beneficiary?

Should you fail to name a beneficiary, your non-retirement assets will be added to your estate. If you have a spouse, they will be the main beneficiary of these assets. When you’re not married, they will be directed to your estate.

Regular maintenance

Keep updating your beneficiary designations on a routine basis. Here is a helpful guide for good opportunities to do so:

  • When you are filing your taxes, review your designations.
  • After divorce, marriage or the birth of a child, ensure you go through your designations.
  • Review your designations if you change retirement plans or switch to a different insurance provider.

Beneficiary designations are essential for your financial plan. Make sure you coordinate your will and your assets since the beneficiary designations are independent from what you write in a will.