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It’s easy to overlook updating your beneficiaries. Making plans for your assets after your death is not something you want to think about. However, updating beneficiaries is a task that should be a part of your annual financial review. If you fail to make the updates, you increase the risk of accidentally disinheriting a loved one or that your final wishes will not be followed. 

The importance of updating beneficiaries

There are two good reasons to update your beneficiaries on both your accounts and in your will. Keeping this information current ensures your assets will go where you want them to go (e.g., to one or more individuals, a charity, a trust, etc.). By law, the beneficiaries (including people, trusts or charities) listed on your account forms will receive your assets, regardless of what is listed in your will. So be sure that all beneficiary designations between your accounts and your will match. Plus, keeping your designated beneficiary preferences up to date now often prevents the time-consuming and potentially costly probate process for your family later.

How do you know when it’s time to update your beneficiaries?

There are a few situations that may prompt a review of your beneficiaries:

Benefits renewal period. Your employer may require you to review your beneficiary information form and re-confirm who you have chosen to receive your employer- sponsored assets.

Job change. If you have recently changed jobs, you may need to roll over your retirement account to your new employer or into a new retirement vehicle. That would be a good time to check your designations.

Life change. Any time there is a major life change — birth, death, marriage, divorce, new job, new home — is a good time to review the people or organizations you have chosen to receive your money and property.

Estate planning. If you recently updated your will, check that your beneficiary designations there match all financial documents including life insurance policies and financial accounts. Again, a will does not override account beneficiary designations. If the designations don’t match, the beneficiaries listed on your various accounts will overrule what your will says. So, be sure to make all beneficiary changes, if necessary, at that time.

Time to get started

Outside of important life events, it’s a good idea to review your beneficiary forms at least once a year. And because life is unpredictable, it’s also a good idea to name one or more secondary beneficiaries. This may help eliminate confusion in case a primary beneficiary dies.

If you’re having trouble organizing your estate documents or need help getting started, your Credit Union can help with affordable estate planning from a participating attorney.

The advice provided is for informational purposes only. Contact a legal professional for additional guidance. 

Attorneys participating in the Estate Planning Essentials Program are not employees or agents of the Credit Union, Members Trust Company or any affiliated entity. Trust Representatives are not employees or agents of the participating attorneys. The program is optional for Credit Union members, who may use a participating attorney or select their own attorney. The Credit Union and Members Trust Company are not providing legal services and are not responsible for the services provided by these independent professionals. Trust services are available through Members Trust Company, a federal thrift regulated by the Office of the Comptroller of the Currency. Trust products are not Credit Union deposits, are not insured by NCUA or any other federal government agency, are not obligations of or guaranteed by the Credit Union, Members Trust Company or any affiliated entity, and involve investment risks including the possible loss of principal. The material above is for educational purposes only and is not intended to provide legal or tax advice regarding your situation. For legal or tax advice, please consult your attorney and/or tax professional.

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