It’s 2015: Do You Know Who Your Beneficiaries Are?

Thanks to our friend Ivie Burns for this week’s guest post.

2013 2Ivie 300dpi less than 4mb for website - CopyWhen was the last time you checked your designations for beneficiaries in your retirement plan, annuity or life insurance policy? If you haven’t examined it since the account was set up, you are not alone. But don’t hesitate.  If you have switched jobs, become a new parent, divorced or survived a spouse or a child, your current beneficiary designations may need to be updated.

Consider the “What If?”
In the heat and emotion of divorce proceedings, for example, the task of revising beneficiary designations can fall through the cracks. A court decree that ends a marriage also terminates the provisions of a will, but it does not automatically revise the beneficiary status of an employer-sponsored retirement account or an IRA. Some financial institutions, such as Morgan Stanley, automatically cancel the designation of a spouse as the beneficiary of an IRA in the case of divorce, but not all do.  So, for example, if an IRA owner remarries and has a new family, but fails to change the beneficiaries on the account, the original beneficiary may have a legal claim to the assets in the event of death.

Also keep in mind that the law requires that a spouse be the primary beneficiary of a 401(k) or a profit sharing account, unless he or she waives that right in writing. A waiver may make sense in a second marriage if a new spouse is already financially set, and the children from the first marriage may need the money.

Steps to Stay Current

  1. Make a list of all accounts that have named beneficiaries. This may include 401(k) plans, 403(b) plans, 457 plans, IRAs, pension plans, life insurance policies, annuities and bank accounts.
  2. Contact the plan administrator or financial institution that maintains or services your account to verify your current beneficiary designations. You may want to do this with the help of your tax advisor or estate planning professional to ensure that these documents are in synch with other aspects of your estate plan.
  3. Keep it safe. Store this list in a safe place with your other estate plan documents, such as your will, health care proxy and power of attorney, and make sure your designated executor has a copy.
  4. Register for online access. If you do not already have online access to your accounts with beneficiary designations, consider registering so you can view and update your account information whenever you need to.
  5. Consolidate. If you have changed jobs and left your assets in your former employers’ plans, you may want to consider moving these assets into a rollover IRA. Consolidating multiple retirement plans into a single tax-advantaged account can make it easier to track your investment performance and streamline your records, including beneficiary designations.

Naming beneficiaries and keeping them up-to-date is one of many important aspects of your future financial health.  Spend 10 minutes today and ensure you’re covered on this important step.

Contact Ivie and his team at

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