Once you have a comprehensive estate plan in place, it is important to keep it up to date. This is particularly important for the beneficiaries you listed for things like retirement plans, IRAs, life insurance policies, bank accounts, and investment accounts. A recent article outlined the following six reasons for why you should update beneficiaries on these and similar accounts:
- You got divorced or remarried: Make sure you don’t accidentally exclude a new spouse from an estate plan or accidentally include an ex-spouse.
- You changed jobs and rolled over your retirement plan: In this instance the old beneficiary commonly does not follow to the new account, so you will have to rename him or her.
- Your primary beneficiary died: If you had second beneficiary named, that person would automatically become the first beneficiary in line.
- Your financial institution changed ownership: This can result in the loss of your beneficiary forms, or the new institution requiring a new form be filed.
- You had a child or grandchild: You might want to make sure to include new family members as beneficiaries on your assets. If your spouse is listed is your primary beneficiary, considered naming your new child as a secondary beneficiary. You could also name a trust as a beneficiary if the child would be too young to manage the asset.
- Your beneficiary became disabled: You might want to name a special needs trust as a beneficiary so that it can manage the asset for the disable individual. If you leave money directly to a special needs individual, you he or she might lose eligibility for Medicaid or Supplemental Security Income (SSI) benefits.
