Beneficiary Designations

By Mike Alread, CFP®

When was the last time you reviewed your beneficiary designations?  Generally, you have named beneficiaries on your life insurance policies, all retirement accounts (401k, IRA, Roth IRA, 403b, 457b, etc.) and POD/TOD (Payable on Death and Transfer on Death).  Also, for those of you that have revocable trusts or trusts created under will, beneficiary and disposition language should be looked at as well.


Consider this:  Just because someone gets divorced doesn’t mean that the beneficiary designations will change.  In fact, they won’t change unless you sign forms to make the new changes.  If someone you named as beneficiary dies before you, then their “estate” may wind up being the beneficiary of your assets, which probably isn’t what you want or intend to happen.  The scenarios I have seen play out over the years because of not having the correct beneficiary designation has not always been good.  In fact, more often than not, they have been terrible.

There can be much complexity (financial, emotional, and time) avoided by simply having the correct beneficiary designations that match up to your objectives.  I recommend a review every 3 years or so unless something major in your life occurs: job change, new children, disability, divorce, death of named beneficiary, etc.  It is important to make sure that what you want to happen at your death will actually happen.  Remember, there are no “do overs” once you have passed on!

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Form ADV Part 2A
Form CRS