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Having an estate plan is one of the most essential parts of planning for your future and the future of your family. However, all too often, well-intending people create an estate plan, yet as circumstances in their life change over the course of time, they forget to update their beneficiary designations. This can be a big issue, because in the event that something happens unexpectedly, beneficiary designations can trump personal wishes as well as the “assumed” course of designation, such as a spouse automatically being named as the beneficiary.
If you have an estate plan, keeping on top of your beneficiary designations is a must. To update your estate plan today, contact Patricia Bloom-McDonald, Attorney at Law.
What Happens If You Don’t Update Your Beneficiary Designations?
Forgetting to update your beneficiary designations when you experience major life changes can result in a complicated legal situation, or a situation where those whom you wish to be beneficiaries at the time of your death are not. Consider a couple examples of what could happen if you fail to update your beneficiary designations:
- You’re working in a great job with great benefits. You decide that in addition to your 401(k) policy, it’s also time to take out a life insurance policy. Because you’re single, you name your parents as beneficiaries. You don’t give the policy much more thought.
A few years later, you get married, and a couple of years after that, you’re a parent! In a tragic and unexpected accident, you suffer fatal injuries. Rather than your spouse and children collecting benefits, your parents are the named beneficiaries.
- Or, consider the opposite situation: you are married and have children, and name your spouse and children as your beneficiaries. But a few years later, you get divorced, yet fail to update your policy. IF you are involved in a fatal incident, your ex- spouse is the named beneficiary.
If you are assuming that children and a spouse are always the first to be paid from a deceased’s estate, think again; in many cases, whoever is the named beneficiary will be the one to whom benefits are paid, regardless of relationship with the decedent.
Check Your Beneficiary Designations on a Routine Basis
The best way to ensure your estate and any policies or benefits you hold . . . ranging from a retirement account, to a home, to a life insurance policy, and more . . . will be allocated to the person of your choosing at the time of your death is to update your beneficiary designations on a routine basis. Sitting down with your lawyer on an annual basis to review your estate plan is a wise idea, and you should absolutely meet with your estate planning attorney if you experience any life changes, such as the birth of a child, a divorce or marriage, or a death in the family.
Contact Our Life Planning Attorney Today
At the Law Office of Patricia Bloom-McDonald, our life planning and elder law lawyer can help you to ensure that your estate plan and named beneficiaries are up to date. To schedule a consultation today, please call Attorney Patricia Bloom-McDonald today or send her a message telling us more about the legal services in which she can assist you with.