It’s a subject that many forget about, but have you checked who you’ve designated to inherit your retirement account recently? If not, you may find that your designated beneficiary is not who or what you think it should be. When changes in life occur, a person’s current beneficiary choices – who will inherit their life insurance, pension, IRAs, etc. – may need to be updated. It is important to periodically take time to review one’s beneficiaries.
- Retirement account beneficiary designations trump your will and/or trust directives, so they need to be periodically checked and updated.
- Beneficiary designations should be reviewed immediately after major life events like a remarriage or divorce, the death of a spouse, or the adoption or birth of a child.
- There are several ways you may want to customize your beneficiary designations.
While many of us ensure that other important documents such as wills are updated on a regular basis, oftentimes people forget the designations on their IRA and 401(k) accounts. They’re easy to overlook. After all, you filled in a name when you established the account ages ago and have had no need to look at the registration paperwork since. But to ensure your wishes are followed after you go – and to save your survivors the trauma and expense of a legal fight – check those designations periodically and keep the beneficiaries current.
We strongly advise that you encourage your employees to take the time to review their beneficiary information and to keep a record for their own files of who their beneficiaries are. If you have any questions about the beneficiary information of the participants in your plan, we are happy to help.