We are your Southern California partner in estate administration and estate protection.

What do you need to know about designating beneficiaries?

On Behalf of | Jul 20, 2016 | Estate Planning |

When you’re drawing up your estate planning documents, your California estate planning attorney will remind you that you need to ensure that you’ve designated the beneficiaries whom you want to receive the assets from your 401(k), other retirement accounts, life insurance policies and annuities with the company or institution where they’re housed. Many people think that just listing the beneficiaries for those assets in their will is sufficient. However, it’s not. The beneficiary designations on those accounts and policies supersede what’s in the will if there’s a discrepancy.

There are some important things to keep in mind when naming beneficiaries. For example, you should name a primary as well as a contingent beneficiary. This will save you having to make a change should your primary beneficiary pass away.

If your children are still young, it’s best not to name them under the assumption that they’ll be grown by the time you die. None of us knows when that will happen. One option is to set up a family trust and make that the beneficiary.

Review your beneficiary designations on your accounts and policies regularly to ensure that they’re still what you want. Some companies will send reminders once a year to do that. Of course, if a situation changes and you no longer want someone to receive your assets, make the change on your accounts and policies immediately. Your attorney can advise you on whether you need to make any amendments to your estate plan.

Each person’s situation is unique. For example, if you are leaving the bulk of your estate to charitable organizations, you may want to set up a revocable living trust and make that the beneficiary on your accounts and insurance policies. There are many options. Your California estate planning attorney can review those with you and help you develop an estate plan that helps ensure your assets are distributed as you choose after you’re gone, with as little hassle and expense to loved ones as possible.

Source: Rocky Mount Telegram, “Things you should know about naming beneficiaries,” Anthony Engrassia, July 15, 2016