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Take Time to Check Beneficiary Forms
By Joel Feiger
When you purchase a life insurance policy or open a retirement plan (for example, participating in a company sponsored retirement plan or a personal IRA), you name a beneficiary who will get the money when you die. We recommend you review all beneficiary designations annually and upon life events (such as childbirth, divorce, death of a close relative). Most people make that choice when they buy the policy or set up the plan, and they don’t think about it again. But that failure to act can be devastating failure for the people you love.
That’s because life changes, and you need to make sure that your beneficiary designations change with it. For example, say you named your spouse as your primary beneficiary and your children as your secondary beneficiaries, meaning they get the money if you and your spouse both die. But years later, your marriage dissolves and you divorce. Maybe you marry again. But if you don’t change your beneficiary, your first spouse is still the beneficiary of your life insurance and your retirement fund. And that could be a financial disaster for your current spouse.
Even if you and your spouse remain happily married, you might want to reconsider your choice for secondary beneficiaries. As your children become adults, marry and have children of their own, do you want to name your grandchildren as secondary beneficiaries?
There are also estate planning and tax considerations in naming beneficiaries. Many people name charities, foundations, or trusts as beneficiaries. You may want to talk to your estate attorney or tax advisor about those concerns.
The bottom line, though, is that you want to be sure that you are protecting the people you want to protect. And something as simple as reviewing your beneficiary forms can help you do that. For help with this or any other financial planning need, call me or any member of The Bensman Group team, at 847-572-0800 or firstname.lastname@example.org