Archie and his colleagues were working extra hours on an important new product. One evening after a long strenuous day, Archie and his team decided to stop for dinner on the way home. After a quick dinner, Archie was excited to see his family and play with his daughter before her bedtime. Unfortunately, he never made it. His life was taken by a drunk driver.While you can imagine the traumatic effect on his loved ones, it was made worse by the fact that he had never updated his beneficiary form for his company group life insurance or his company retirement plan. As a young, single college grad, Archie had named his sister as his beneficiary and never thought to make the change as his situation changed. His sister was happy to accept the benefits. This is a true story.
Life insurance, IRAs, 401Ks, and annuities all transfer directly to the named beneficiary regardless of your what your will or trust says. Also, there are important tax and benefit considerations to understand when naming your beneficiaries. The relationship of the beneficiary to the account owner or insured is often a factor in determining the distribution options and taxes.Beneficiaries should be reviewed on a regular basis and each time there is a significant life change. It is a good idea to keep all beneficiary forms or a review summary with your important estate documents. At Argus Financial Consultants, we are incorporating a beneficiary review into our ongoing review process.
When I heard the story above, it was a wake-up call on the critical importance of this for our clients. While we proactively discuss the beneficiary designations on accounts that you have with us, we need to also review those accounts that you have at work and your insurance beneficiaries. It would be a good idea if we maintained a record of these also. Do not hesitate to contact our office to discuss this further.