It’s been some time since I’ve written about beneficiary designations. Beneficiary designations are often overlooked or forgotten, and that can result in complications for everyone.
Today, let’s review why beneficiaries are important, what types of accounts typically ask you to designate a beneficiary, and what to think about when designating beneficiaries.
A beneficiary is defined as:
- a person or group that receives benefits, profits, or advantages
- a person designated as the recipient of funds or other property under a will, trust, insurance policy, and other accounts
As we work and accumulate assets, we are asked to sign forms designating a beneficiary (someone who will inherit) to receive what we have built up should something happen to us. It is a good practice to review any/all beneficiaries to make sure your designation is up to date, especially when “life happens” (i.e., moves, marriage, divorce, death of a designee).
When a designee is not named or is incorrectly named, disbursement of your funds may be delayed. If you name a minor child, for example, the laws limit inheritance until they reach a legal age. A minor can be named a beneficiary, but can’t legally control assets. If a beneficiary is a co-owner of an account, they may be liable for your final creditor claims and/or experience large tax consequences.
If you do not name a beneficiary, there may be contract provisions that designate a default recipient, which may or may not represent your wishes. In the case of a special needs child, you may impact their receipt of government aid for their disability. If you have remarried, make time to go back in time to accounts you had in your “previous life” to check the beneficiary for those accounts.
Remember to consider back-ups. Should something happen to a designee, you’ll want to consider a Plan B. Here is a listing of common places asking for a beneficiary designation:
- Financial Accounts
- Retirement Accounts
- Investment Accounts (includes annuities)
- Stock Option Plans
- Pensions
- Insurance Policies (i.e. Life Insurance)
- Real Estate Holdings (Including timeshares)
- Partnerships (Buy-sell Agreements)
This time of year is often when financial institutions reach out to us to ask whether we wish to update any designations. When those letters come in, it is a great time to check whether and who you have designated as a beneficiary on the account.
If you’d like to update your beneficiary form, take care to update it with correct information and keep a copy of the changes you make in writing with the company. Speaking of copies, it is helpful to keep copies of all beneficiaries in a safe place for you and for the executor of your estate.
Last, but not least – communicate! Communicate with recipients and with your executor about your wishes and plans. If you’d like some help assessing where you are today and what’s important to consider moving forward, let’s get ready together!
One side note: mark your calendars for a weekly Four-Part Series beginning 1/14/2026, “Caught in the Middle.” Lucy Seligman and I are addressing the critical issue of caregiving. We’d love for you to join us! Caregiving is prevalent, and it can be quite a journey, especially for those with children and for those in full-time jobs.
Lucy and I hear it frequently in our work with separate clients. We’ve put this together from the emotional management and practical planning perspectives, highlighting our personal and professional experiences.
If this is something of value for you or people you know, here is the link to check out the details and register: https://lucyseligman.com/caught-in-the-middle or use the QR code below.
One side note: mark your calendars for a weekly Four-Part Series beginning 1/14/2026, “Caught in the Middle.” Lucy Seligman and I are addressing the critical issue of caregiving. We’d love for you to join us!
Contact me anytime to learn more about how I work with individuals, business owners, and employees via Email or online @ The Living Planner. Book a Time with Lynn for a complimentary 30-minute Zoom with me.
Quote of the week: “When we give cheerfully and accept gratefully, everyone is blessed.” – Unknown
Remember to look after yourself this holiday season 🎄Lynn
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