In 2013, the U.S. Supreme Court settled a case between a widow and her deceased husband’s former wife regarding who would receive the man’s federal employee insurance benefits. The judges ruled in favor of the first wife, even though the couple had been divorced for more than 10 years when he died, because she was still the designated beneficiary on his policy.1
Some people may not be aware that the assets in most bank accounts, retirement plans, and insurance policies convey directly to the people named on the beneficiary forms, even if they are different from the people named in their wills or trusts. Others simply forget to make the appropriate changes in writing.
If your beneficiary forms are out of date — and your intentions somehow become a matter of dispute — state and/or federal laws or the administrator’s plan documents could ultimately determine who receives your assets.
Find out what's happening in Huntingtonwith free, real-time updates from Patch.
A Common Oversight
It’s generally a good idea to review your beneficiary designations annually, and to inform your financial professional when there are changes in your life that could affect your choices, such as the birth of a child, the illness or death of a family member, marriage, divorce, and especially remarriage.
It’s fairly easy to update your beneficiaries. You can simply file a new beneficiary designation form with the appropriate financial institution or insurance company. Here are a few other things to consider when naming new beneficiaries.
Find out what's happening in Huntingtonwith free, real-time updates from Patch.
- Many laws favor spouses, so be careful when you intend to name someone other than your spouse as a beneficiary.
- Don’t name minor-age children without making arrangements for a guardian or trustee to control the assets until the beneficiary is old enough to manage them.
- Request an acknowledged copy of each new or updated beneficiary form from the financial institution or your financial professional (or print a copy if filed electronically) and store them with your other important documents.
Deciding Which Docs to Keep or Toss
It’s not unusual for people to have several file drawers or even many boxes full of old financial records. However, the more unnecessary items you have, the harder it can be to find critical papers when you actually need them.
If you want to rid your home of unnecessary paper clutter, it could be worth the effort to sort through your files. There are several important reasons to keep specific records for future reference: to back up information on tax returns, as evidence of an ongoing contractual agreement, or for proof that you made (or are entitled to) a major payment.
To help protect your privacy and your identity, make sure to shred financial documents before throwing them away.
Our philosophy is to listen, discuss your options, and present solutions. Click here to watch our short video and learn how Ten Haagen Financial Services may be able to help you with your goals and needs.
We welcome your questions and comments. Remember, when planning your financial future, the sooner, the better!
JON TEN HAAGEN, CFP, RPC
Your Investment Portfolio Repairman
Founder and CEO
Ten Haagen Financial Group
191 New York Avenue
Huntington, NY 11743
631-425-1966
516-658-2827
jonlth@tenhaagen.com
www.tenhaagen.com
Connect with us on LinkedIn and Facebook.
1) Forbes, June 3, 2013
The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2014 Emerald Connect, LLC
