FAQ:

What is the best way to handle beneficiary designations on life insurance and retirement benefits?

Most people will pass substantial wealth to their loved ones in the form of life insurance, annuities and retirement plans. These assets are controlled by beneficiary designations, not by your will or your trust. Consequently it is critical to review beneficiary designations and keep them current to assure that these assets will pass to the right people, in the right way, at the right time. Common problems with beneficiary designations include:

• Beneficiary designation forms have been filled out incorrectly or have become outdated.

• Multiple and contingent beneficiaries are often designated for life insurance, annuities, and retirement benefits. In naming beneficiaries, assumptions are made about who will die first. If deaths occur in an unanticipated order, assets may not pass as you intended.

• Beneficiary designations may not take into consideration or be consistent with other estate tax planning that has been implemented.

• When children are named as beneficiaries or contingent beneficiaries, they will receive all of the property outright at age 18. Prior to that age, a conservator will have to be appointed by the court to hold these assets for them.

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