Beneficiary Designation Forms

It’s time for some spring cleaning, and on your list, make sure to add checking your financial accounts with beneficiary designations. They range from annuities, to IRA’s, 401(k)’s, life insurance policies and more.

If you have accounts with beneficiaries designated, it is important that you understand the beneficiary designations will take precedence over a will, trust or other estate planning instrument. As a simple example, if you have four children, and you’ve written them all into your will, but only two of them are listed as beneficiaries of an annuity, then only those two will get the annuity proceeds. Sounds elementary, but often times, many of us believe writing a will takes care of ‘everything’.

Sometimes, we open accounts hastily, and may only partially complete the beneficiary designation list (i.e., name only one child instead of all of them). Other times, beneficiary forms are simply overlooked and they’re blank. There are also rare circumstances where a financial institution may ‘goof’ and have the wrong names listed as beneficiaries of your account. All of these potential issues mean it is a good idea to check your beneficiaries. 

Here are a few tips:

  • First, compile a list of all of your accounts if you don’t already have a list. Determine how the account is titled (i.e., in your name alone, you and your spouse’s names, etc.). Determine if the account has beneficiaries designated.
  • Make sure to name primary AND contingent beneficiaries. 
  • Many companies allow you to use an online beneficiary designation form. If this is available, try using this as it is generally more efficient on both sides. You should be able to get instant verification of the changes made, or that everything is correct as you intend it to be.
  • If the company does not offer an online form, then you should call the company and request blank beneficiary designation forms to be mailed to you.
  • Once you have verified or changed your beneficiary designations, keep your own list of who the beneficiaries are on each account.