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Principled Advocacy For Families And Individuals With Disabilities And The Professionals Who Serve Them

2 instances when you should update beneficiary designations

On Behalf of | Nov 30, 2023 | Estate Planning

When did you last check who you’ve designated to inherit your retirement and investment accounts? If you can’t clearly remember, then it’s probably time to update your beneficiary designations.

It’s natural to think that you have plenty of time to make necessary updates to your estate plan. However, when it comes to assigning beneficiaries their fair portion of your estate, it’s better to be safe than sorry. Knowing the instances when you should proactively update your beneficiary designations can save you from making consequential mistakes down the road.

Life changes

Life is dynamic, marked by events that can reshape your priorities and relationships. Major life events, such as marriage, divorce or childbirth, warrant a meticulous review of beneficiary designations. Failing to update these crucial details can lead to unintended consequences, leaving assets in the wrong hands.

When you tie the knot, it’s not just a celebration of love; it’s a shift in your financial dynamics. Updating beneficiary designations helps ensure that your spouse is appropriately recognized and provided for in case of unexpected events.

Conversely, divorce necessitates a thorough reassessment of beneficiaries. Failing to remove an ex-spouse may unintentionally result in them inheriting assets, causing unnecessary stress and legal complications for your heirs.

Asset acquisitions and dispositions

As your financial portfolio evolves, so should your beneficiary designations. The acquisition or sale of significant assets, such as real estate, businesses or investments, demands a reassessment to align your beneficiaries with your current holdings.

Clearly, reviewing and updating your beneficiary designations can save you and your family a lot of trouble. Try to ensure you check your designations as soon as an incentive arises to confirm your hard-earned assets are passed to the intended recipients.