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Don't wait! Check your beneficiary designations today

Have you been patting yourself on the back because you have an estate plan? It feels good knowing that you have done all you can to prepare for what is to come.

As a part of your comprehensive estate plan, your attorney probably explained the importance of completing your beneficiary designations on life insurance policies, bank accounts, pension plans and the like. Whether you set up your estate plan a decade, three years or six months ago, let this serve as a reminder to verify that you designated primary and secondary beneficiaries and that you should recheck your designations on a periodic basis.

When do I need to change my beneficiary designations?

The best thing to do is to get in the habit of checking your beneficiary designations on a regular basis. You will need to review your designations immediately if there is a triggering event, such as a:

  • Death within your immediate family
  • Death of relative or another whom you may have named as a beneficiary
  • Divorce or separation
  • Remarriage
  • Falling out with a named beneficiary
  • A change of heart regarding a family member's level of need

What can happen if I don't designate a beneficiary?

You may have heard stories about family members not receiving inheritances due to one mistake or another. A recent news article explained three unfortunate incidents that could have been easily avoided:

  • A man failed to name a new beneficiary in his pension plan after his wife's death. At his death, his "beloved" adult stepsons did not receive any pension benefits. If he had changed his beneficiary designation after his wife's death or named his stepsons as joint secondary beneficiaries while she was alive, they would have received the plan benefits.
  • A woman inherited her ex-husband's life insurance and pension benefits because he failed to change his beneficiary designation. Unfortunately, he died in an accident two months after the divorce, and his children from his first marriage received no benefits. Fortunately, state laws help beneficiaries in Colorado avoid this type of result. 
  • Despite waiving all rights to her ex-husband's corporate retirement plan, a woman inherited $400,000 seven years after their divorce because she never signed the official beneficiary designation change form required by the plan.

Don't put it off any longer

If you have not yet named your beneficiaries, your circumstances have changed or you are not sure who your beneficiaries are, follow up as soon as possible.

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