~Why your beneficiary forms matter just as much as your trust~
by Susan M. Graham, Certified Elder Law Attorney*, Senior Edge Legal, Boise, Idaho
Last month, we lost a longtime client who had done everything right — or so he thought.
Five years earlier, he updated his estate plan with a clear goal: leave his home, savings, and life insurance to his six grandchildren for their education, and leave out his companion of 20 years and his three grown children. It was his choice to make, and he made it with a clear mind.
We drafted the plan exactly as he wanted, and sent him the paperwork every bank, insurance company, and retirement account needed to update his beneficiaries to match. Each form asked him to name his estate or his trust as beneficiary. He never sent them back. The forms sat in a corner of his office for five years.
When he passed away, his trust said one thing. His accounts said another. Beneficiary designations control life insurance, retirement accounts, and many bank accounts and CDs — regardless of what a will or trust says. Because he never updated those forms, more than half of his life insurance, retirement funds, and bank accounts went straight to his companion of 20 years. His six grandchildren received only a modest amount each.
His estate plan was well-written and his wishes were clear. But the paperwork sitting in that corner overrode all of it.
A Simple Habit That Protects Your Wishes
Beneficiary designations are not paperwork you fill out once and forget. They need to be reviewed every time your estate plan changes, and again every few years even if nothing has changed. Here is what we recommend:
- Make a list of all your accounts that use beneficiary designations — life insurance, IRAs, 401(k)s, annuities, and POD (paid-on-death) bank accounts and CDs.
- Compare each beneficiary listed today with what your current estate plan says should happen.
- Return every change-of-beneficiary form to the company right away, or get new forms to complete. A signed form sitting in a drawer protects no one.
- Confirm receipt. Call the company or check your online account to make sure the change was actually processed.
- Review again after any major life event — a birth, a death, a marriage, a divorce, or a new relationship.
Your Plan Only Works If It’s Complete
An estate plan is a promise to the people you love. That promise depends on every piece lining up — the trust, the will, and every beneficiary form behind it. If it has been more than a year since we reviewed your beneficiary designations together, please call our office. It is one phone call that can make sure your wishes, not a stack of unopened mail, decide what happens to what you’ve built.
Your Next Step
For our Senior Edge Legal clients, call 208-344-0375 or Contact Us. and ask for a beneficiary designation review. Bring your most recent statements for every life insurance policy, retirement account, bank account, and CD so we can compare them against your estate plan together.
For all others, call 208-344-0375 or Contact Us. this week to set up your own estate plan.
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Undoubtedly you have thought of someone who could use our services. If so, please have them call us at 208-344-0375. Introductions and referrals are the lifeblood of our practice. Thank you.
* Certified by the National Elder Law Foundation
