You’ve spent a lifetime saving for the future. Have you taken the appropriate steps to ensure that your assets are passed on to your chosen beneficiaries?
According to a recent report, baby boomer parents will transfer approximately $30 trillion to the next generation over the next 30 to 40 years. While properly naming beneficiaries for your non-probate assets (IRAs, company-sponsored retirement plans, life insurance policies, education savings accounts and annuities, as well as “in trust for” and “pay on death” accounts) is the simplest and most direct way to pass your assets into the hand of your loved ones, that only holds true if you have completed the paperwork properly and the information is up-to-date.
Why name a beneficiary?
Probate, where the court determines who receives your property after your death, is a timely process. Designating a beneficiary typically avoids the need for your assets to pass through the probate process. Non-probate assets bypass the court system and go directly to your beneficiaries.
How many beneficiaries do you need?
Typically, you should name a primary and a contingent beneficiary on your accounts. For example, if you were married when you opened the account you probably named your spouse as your primary beneficiary and named a child/children, parent or sibling as a contingent beneficiary. Should the primary beneficiary predecease you, the contingent beneficiary will receive the asset.
What happens if my beneficiary is a minor?
Naming a minor as a beneficiary requires consideration. If you wish to name your child/children as contingent beneficiaries, for example, a guardian may need to be involved until the beneficiary is no longer considered a minor.
How could my estate become the beneficiary?
If you neglect to name a primary beneficiary(ies) or contingent beneficiary(ies) on your accounts, your estate may become the beneficiary. Or, if your designated beneficiaries preceded you in death, your estate may become the beneficiary. When the estate becomes the beneficiary, the assets are subject to the delays and costs of probate. Should a will not be in place, state law will determine who receives your assets.
How do I protect my assets for the future?
It is essential to review and update the beneficiary designations on a regular basis and whenever you have a major life change (marriage, birth of a child, adoption, death of a spouse or divorce). If you neglect to change the beneficiaries on your accounts, your assets could pass to beneficiaries who are no longer appropriate, like an ex-spouse.
By making sure the information on your accounts is current and correct, you can have peace of mind for the well-being of your loved ones. Confused? Let an investment professional at Vantage Investment Services Group (ISG)* help you.
Protect your assets. Review your beneficiary designations today!
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