By Hayden Baugh


Beneficiary designated assets are financial accounts that automatically transfer to a specific person upon the account owner’s death, such as retirement accounts, life insurance policies, or bank accounts. It is important to make sure that the beneficiary designation is up to date on these types of financial accounts and policies, as the named beneficiary will receive the asset without requiring the probate process to transfer ownership of the asset. This may result in a distribution of assets inconsistent with the decedent’s will. Sometimes, this inconsistency can be an asset distribution strategy tailored to the decedent’s specific situation; however, there are many instances where outdated beneficiary designations lead to unintended distributions or failed designations. To avoid the consequences of outdated beneficiary designations, an account holder should periodically check their beneficiary designations and update them as may be needed.

Most financial institutions provide flexibility with how beneficiary designations are set. An account owner may name multiple beneficiaries to divide the account in stated percentages, or they may choose to divide the account equally amongst multiple beneficiaries. If their primary named beneficiary is no longer living, then the asset may pass to a contingent beneficiary. For this reason, it is important to name both primary and contingent beneficiaries and continue to update beneficiaries regularly so that assets transfer smoothly outside of probate in the event of worst-case scenarios.

Changes in circumstances can make decades old beneficiary designations obsolete at the blink of an eye. It is vitally important that these beneficiary designations are up to date to ensure that the account holder’s final wishes and estate planning objectives are accurately and efficiently executed. Updated beneficiary designations are a key component to every estate plan, and I would be happy to discuss your beneficiary designations and estate plan with you. To set up a complimentary estate planning consultation, email me at today!

With this knowledge, now you can Rest Easy.