Beneficiary designations on financial instruments and accounts such as insurance policies, annuities and retirement accounts play a major role in the estate planning process. When you make a beneficiary designation, you are choosing who will receive a substantial asset. You need to look at your beneficiary designations holistically to ensure they comport with your goals and objectives.
The problem is that life changes can alter your goals and objectives. Every year that passes can see dramatic modifications in your life circumstances – a new job, a new home, a new marriage, new children, or stepchildren, etc. If you put together your estate planning documents years (or even decades) ago, they may not reflect your current wishes or goals. They have been safely tucked away gathering dust while you have been doing just the opposite.
Time may have changed your life, and you must actively change your estate planning documents accordingly (with an experienced estate planning attorney, of course). This includes reviewing and modifying the beneficiary designations in those documents. Specifically, ensuring that the previous beneficiaries you chose to inherit your 401(k), IRA, pension benefits, and life insurance benefits are the same beneficiaries you want to receive those assets today.
New Family Dynamics
Perhaps you were married when you made your initial beneficiary designations, got divorced, and subsequently remarried. You have children from your first marriage but you may also have stepchildren as part of your new “blended family.”
Many state intestacy laws, including Florida’s, pass an individual’s probate assets to blood relatives. As such, many people who find themselves with new dependents or family obligations choose non-probate assets, such as life insurance or retirement accounts, to provide for stepchildren.
Becoming a new parent isn’t the only life change that should cause you to take a look at your beneficiary designations. Your original estate plan may be wildly out of sync with your wishes today if you don’t: add additional children as beneficiaries when born; remove deceased individuals as beneficiaries; remove ex-spouses or former in-laws as beneficiaries; fail to make specific arrangements for dependents with special needs.
Southwest Florida Estate Planning, PLLC: Review Your Estate Plan Today to Ensure a Secure Tomorrow
Planning for life means planning for the changes that happen in the future. It means keeping in touch with you and making sure that your estate plan keeps up with any changes to your circumstances or wishes.
At Southwest Florida Estate Planning, we work across generations to provide a lifetime of counseling and services to our clients. If you’d like to start planning for life or have estate planning and elder law questions, please give Southwest Florida Estate Planning a call at (239) 216-4107 or fill out our online form. We look forward to assisting you.