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Don’t Forget Beneficiary Designations With Valerie Hogan
Episode 302
WHY ARE BENEFICIARY DESIGNATIONS IMPORTANT?
Beneficiary designations are crucial because they're an easy, quick, and free way to transfer assets, accounts, and insurance benefits after passing away. They take precedence over wills or trusts and are significant because they skip probate and remain private.
- Beneficiary designations offer a straightforward method to transfer assets after death.
- They are prioritized over estate planning documents and bypass the probate process.
- Keeping them updated and accurate is crucial for ensuring assets are distributed as intended.
WHAT ARE THE KEYS TO REMEMBER ABOUT DESIGNATING BENEFICIARIES?
When designating beneficiaries, it's important to consider various account types like IRAs, 401(k)s, life insurance policies, and regularly update these designations. Ensure that primary and contingent beneficiaries are named and understand the implications of each type. It's also vital to coordinate with your will or trust and consider the potential uneven growth of different assets.
- Review and update beneficiary designations across different accounts regularly.
- Distinguish between primary and contingent beneficiaries and understand their roles.
- Coordinate beneficiary designations with your will or trust to ensure your estate plan reflects your wishes.
IS THERE EVER A REASON NOT TO DESIGNATE BENEFICIARIES?
Generally, there's no good reason to avoid designating beneficiaries. Not doing so can lead to confusion, interpretation by others, or court decisions. Ideally, it's better to name a specific person rather than leaving it to documents or courts.
- It's always advisable to designate beneficiaries to avoid leaving asset distribution open to interpretation.
- Designating specific individuals as beneficiaries is preferable to relying on estate documents or courts.
- Regular updates to beneficiary designations are essential to maintain clarity in estate planning.
WHAT ARE COMMON MISTAKES IN HANDLING BENEFICIARY DESIGNATIONS?
A common mistake is the "set it and forget it" approach, where individuals fail to regularly update their beneficiary designations. This oversight can lead to outdated or unintended distributions of assets.
- Regularly revisiting and updating beneficiary designations is crucial to reflect current intentions.
- Ignoring the need for updates can result in unintended or outdated asset distribution.
- Coordinating beneficiary designations with overall estate plans ensures consistency and fulfills intended wishes.
ON TODAY’S PROGRAM, ROB ANSWERS LISTENER QUESTIONS:
- I'm curious about tax lien auctions; if I purchase a property with a tax lien and the original owner doesn't reclaim it, am I responsible for the existing mortgage?
- As a retiree, I'm considering using $10,000 annually from my $200,000 retirement fund for family vacations; is this a wise decision?
- I'm at full retirement age, receiving Social Security while working full-time; I wonder how my continued employment will affect my future Social Security benefits.
- Next year, when I turn 60, I plan to start drawing Social Security; I'm concerned about the earnings limit and how it affects my benefits.
- We have an adjustable-rate mortgage; with current high rates, should we consider refinancing or stick with our current mortgage?
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Remember, you can call in to ask your questions most days at (800) 525-7000. Faith & Finance is also available on the Moody Radio Network as well as Published on 1 year, 11 months ago