Beneficiary Designations
A beneficiary is the person, or people, you choose to receive your assets. When preparing your estate plan, it is important to review and confirm your beneficiary designations so your wishes are carried out as intended. Keeping these designations current can help protect the assets you have worked hard to build and provide financial support for your loved ones after your death. In many cases, beneficiary designations control how certain assets are distributed, even if a Last Will and Testament says something different. For that reason, it is essential to make sure your beneficiary information is accurate and up to date on all applicable accounts.
The following accounts have a Beneficiary Designation:
Retirement Accounts
- 401k
- Traditional Individual Retirement Account (IRA)
- Roth IRA
- Simple IRA
- Simplified Employee Pension (SEP) IRA
Education Accounts
- 529/ABLE Plan
- Coverdell Account
- UGMA Account (Uniform Gifts to Minors Act)
- UTMA Account (Uniform Transfers to Minors Act)
Other Types of Accounts
- Life Insurance Policy
- Tax-Deferred Annuities
- Trusts
- Cash, Investment, and Security Accounts
This list will help ensure that you have considered all ways that your assets can pass, aside from your Last Will and Testament.
Who Should You Consider When Choosing a Beneficiary?
When choosing a beneficiary, you can consider family members, close friends and/or a charity or non-profit. However, for certain accounts, there may be special considerations when naming a minor, charity or non-profit entity.
Finally, if your circumstances change, make sure to update your beneficiary designations as appropriate.
