Organize Your Affairs – Name Beneficiaries

Kristen R. Testaverde, Esq.  krtestaverde@gmail.com

You have worked hard to provide for yourself and your loved ones.  Odds are, you have a variety of accounts, policies, and plans for your security - such as life insurance policies, bank accounts, pensions, retirement plans, etc. 

These items are all able to be passed outside the probate process (see my post - What is Probate? – http://theprobatelawyer.wordpress.com/2011/02/23/what-is-probate/) and directly to your beneficiaries, provided beneficiaries are named.  Failure to name beneficiaries (and contingent beneficiaries) can lead to payment of your funds to your estate rather than to those whom you intended.  Taking a moment to review these plans and your beneficiaries is an easy and important way to assure that some of your affairs are in order.

To review these plans, reach out to your provider.  This can be the human resources department at your place of employment, your bank, or other institution which provides you with an account.  A few examples:

Bank Accounts – You may hold a bank account jointly with another individual (see my post – Joint Bank Accounts – http://theprobatelawyer.wordpress.com/2011/03/24/joint-bank-accounts/).  These funds will pass directly to the other joint owner by operation of law at your death.  You can also make funds payable on death to another individual, which will prevent present access to the funds, but help to ensure proper delivery to your beneficiary.

Life Insurance – One of the most important items on which you should name not only a beneficiary, but a contingent (“backup”) beneficiary, your life insurance, if properly designated, will pass outside of probate to your beneficiary (see my post – Life Insurance as Part of Your Estate Plan – http://theprobatelawyer.wordpress.com/2011/03/21/life_insurance/).  Life insurance can help loved ones pay for your final expenses and other bills. 

Retirement Plans – Retirement plans also offer a place to name a beneficiary and contingent beneficiary.  Always be sure to name a contingent beneficiary to provide for the event where your first choice is unable to receive the funds (they may pass on before you, choose not to accept the funds for tax reasons, etc).  Make sure that fund you worked so hard for is delivered in accordance with your wishes. 

Other accounts for review include: annuities, stock accounts, brokerage accounts, IRAs and pensions.

How To:  To get started, make a list of your policies and accounts and the institutions which hold them.  Call these institutions and check to see who, if anyone, is listed as beneficiary.  Is this who you want to be listed?  Has this person’s circumstances changed?  Is the contact information for your beneficiary up to date?  Further, make sure you have a contingent beneficiary and that his/her information is current as well.  Often, this is as simple as filling out a beneficiary form and filing it with the institution.  Make sure you understand what these forms are asking.  Your attorney can help with these forms.

This list will also help in your first meeting with your estate planning attorney (see Preparing Your First Meeting – http://theprobatelawyer.wordpress.com/2011/03/14/preparing-for-your-first-meeting-with-your-estate-planning-attorney/).  An understanding of your assets can help you and your attorney decide on the best way to outline your estate plan. 

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