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Have You Reviewed Your Beneficiary Designations Recently?

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Beneficiary designationsIf you have an estate plan in place, you are ahead of over half the population in the United States. Taking the time to create that plan, however, is only the first step toward protecting everyone and everything that is important to you. You must also update your plan for it to be successful and work as intended. The Staten Island estate planning attorneys at O’Reilly Law Firm PLLC urge you to consider whether you need to review your beneficiary designations in your estate plan.

Where Can I Find Beneficiary Designations in My Estate Plan?

Typically, the people you love play an important role in your estate plan. In fact, for many people, their loved ones are the motivation for creating a plan at all. So it should come as no surprise then that beneficiaries are commonly found throughout the average estate plan. For example, you will likely have designated beneficiaries in your:

  • Last Will and Testament
  • Trust agreement
  • 401(k) or IRA
  • Life insurance policy
  • Financial accounts
  • Investment accounts

When Do I Need to Update My Beneficiary Designations?

To ensure that your estate plan works as intended you should routinely review and revise your plan.  Although there is no universally accepted time frame, most estate planning attorneys suggest that you routinely review your estate plan every three to five years throughout your working years and then every five to ten years thereafter. You need to review your plan more often when you are younger because major life changes are more likely to occur during that time. When you conduct a routine review of your estate plan, make sure you pay attention to your beneficiary designations to keep them up to date. Whether during a routine review, or outside of a routine review, some of the most common reasons you might realize you need to make changes to your beneficiary designations include:

  • Birth of a beneficiary. Your existing plan documents should account for future beneficiaries with generic, inclusive language, such as “descendants.” Nevertheless, it is always better to use a beneficiary’s actual name once born to alleviate the possibility of confusion and reduce the likelihood of litigation.
  • Death of a beneficiary. Once again, your existing plan should contemplate the possibility of a beneficiary predeceasing you by including successor beneficiaries or providing instructions for how the assets should be handled in the event of a beneficiary’s death. Nevertheless, if you are aware of the death of a beneficiary it is always best to update your designations to make the successor the primary beneficiary and to name a new successor.
  • You may have already recognized the need to update your beneficiaries if you get married; however, the marriage of an adult child might also prompt you to add, or remove, a beneficiary, depending on your feelings about your in-law.
  • If it is your own divorce, you want to update your beneficiaries as soon as possible to ensure that your now ex-spouse doesn’t inherit your entire estate.
  • Beneficiaries reaching the age of majority. Because a minor child cannot inherit directly from your estate, you may have a trust in place to protect your child’s inheritance. If your child has reached the age of majority, however, it is now possible to add your child in as a beneficiary throughout your estate plan.
  • New accounts/policy/document. A surprising number of people simply forget to name beneficiaries on retirement, investment, and financial accounts. This can cause the asset held in the account to be held up in probate instead of going straight to loved ones in the event of your death.

Contact Staten Island Estate Planning Attorneys

For additional information, please join us for an upcoming FREE online seminar. If you have questions or concerns about reviewing your beneficiary designations, contact an experienced Staten Island estate planning attorney at O’Reilly Law by calling 332- 456-0500.

Neil O'Reilly
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About Neil O'Reilly

Cornelius (“Neil”) J. O’Reilly is an attorney whose practice is focused in the areas of Estate Planning, Estate Administration, and Business Succession Planning. His main goal is to demystify Estate Planning for his clients so they can gain peace of mind knowing that they have provided for their families by passing along their hard-earned wealth and by minimizing the stress they will experience if the client becomes incapacitated or dies. He has created the firm with the belief that an estate plan should be driven by the unique needs and desires of each unique client. That’s why there are no “cookie cutter” plans or canned solutions offered to any client. Instead, Neil helps clients identify their goals and then builds estate plans based on those goals.