Don't Wait Until it's Too Late: Discuss Beneficiary Designations
Few things can divide a family more than disputes over who gets what. Avoid family strife: Keep your will and beneficiary designations updated, discussing with loved ones how you want your assets distributed
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Ensuring Your Property Is Distributed Correctly
An up-to-date will is an important first step in ensuring that the property you want your loved ones to receive actually passes to them. However, a will alone can't control how all property is distributed. Life insurance policies, retirement plan accounts, and certain other assets may allow you to designate a beneficiary. Here are some specifics.
Retirement plan accounts. If you are married, you are generally required to name your spouse as the primary beneficiary of your qualified plan account unless your spouse signs the required type of consent waiving his or her rights to your plan assets. Just be sure to update your beneficiary designation whenever there has been a major life event, such as marriage, divorce, or the death of a named beneficiary. For example, if you name your spouse as beneficiary of your retirement plan and later divorce that spouse, he or she may still be entitled to receive your retirement plan assets when you die if you fail to change your beneficiary designation.
Life insurance proceeds. When you first buy a life insurance policy, you name a beneficiary or beneficiaries to receive the proceeds upon your death. The proceeds of your life insurance policies will generally be paid to the beneficiary or beneficiaries designated in your policy, even if you purport to name someone else as beneficiary of the policy in your will.
Other assets. Other assets also may pass through beneficiary designations. For example, you may be able to designate a beneficiary to exercise any stock options you may have within a certain time after your death. And if you bought company stock through an employee stock purchase plan, you may be able to designate a beneficiary for that stock.
A regular review of your will and your beneficiary designations can help maintain family peace and harmony.