When naming beneficiaries on your banking, retirement, life insurance and other financial accounts, it can be tempting to take a “set it and forget it” approach. But, if you want to ensure your assets go where you want upon your passing, it’s smart to make beneficiary maintenance a recurring “to do” item on your annual financial checklist.
A beneficiary is the person or entity, such as a trust or non-profit, that you designate to receive the assets in your financial accounts when you die. Here’s why you should name beneficiaries on all your financial accounts and regularly review them:
1. Beneficiary designations override a will
Beneficiaries named on your financial accounts supersede the heirs named in your will or other estate-planning documents. For that reason, all financial accounts (regardless of size) should have beneficiaries named — and updated over time, as needed.
2. It’s an act of kindness for loved ones
Designating beneficiaries allows your assets to transfer outside of probate, a court process that is both time-consuming and potentially costly. Taking a few minutes to review and designate your beneficiaries now can help save your heirs from the stress of navigating legal proceedings while they’re grieving.
3. Circumstances change
Time passes and life happens, which means your designated beneficiaries may no longer reflect your current wishes. There is a wide array of life changes that make it necessary to update beneficiaries:
- Marriage
- Divorce or separation
- Death of loved ones
- Birth or adoption
Your advisor is here to help
If you’ve recently experienced a major life event — or if it’s been a while since you last updated your financial accounts — it’s time to review your financial goals and beneficiary designations. Your Ameriprise financial advisor is committed to helping you achieve your financial goals. This includes regular reviews of your progress and investments.