Suppose you are like most people in Harrisburg. In that case, you may only think about your beneficiaries when opening up a financial account, creating a retirement plan, or signing up for life insurance. However, these moments are rare, and it is important to review your beneficiaries more regularly. Various life events trigger a beneficiary update.
Knowing that your beneficiary designations are up to date ensures peace of mind. In this case, if something unexpected were to happen, you would not have to worry about your loved ones being left out. The general rule of thumb is that you should review beneficiaries at least once every three years. To write a will without any legal errors, contact a Harrisburg estate planning lawyer.
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Common beneficiary designation mistakes.
1. Assuming you have a designation.
People often make the mistake of assuming that their last will and testament will handle everything automatically. However, this is not true. The truth is that certain assets, such as life insurance policies, must have a beneficiary designation. Therefore, you should stop assuming anything.
2. Not accounting for all your assets.
Before deciding what and how much you want to leave for your beneficiaries, you must have a list of all the assets you own. Make sure the list contains the following:
- Health Savings Accounts
- 529 education plans
- Life insurance policies
- Investment and mutual fund accounts
- 401(k), 403(b), and other retirement accounts
- Bank and brokerage accounts
- Personal property
- Real estate, including your home and any investment properties
- Business interests
3. Having no beneficiary named.
Make sure to create a list of the people you want to name as your primary and contingent beneficiaries to avoid issues. Your contingent beneficiary, who is next in line, would inherit the assets if your primary beneficiary passes away before you.
If no beneficiary or contingent beneficiary is designated at the time of your death, your estate will become the default beneficiary on the account. By designating a beneficiary, you can avoid the probate process and ensure that the assets transfer smoothly to the rightful person after your death.
4. Designation is not up to date.
Another common mistake people make is forgetting to update their list of beneficiaries. There may have been life changes since you last signed the designation. Therefore, lawyers highly recommend reviewing your beneficiary designation and keeping it up to date to avoid any mishaps.
5. Naming a beneficiary incorrectly.
You must ensure that the beneficiary’s name is spelled correctly. Verify if the beneficiary shares a name with other family members or uses a suffix like Jr. or Sr. Mistakes in naming a beneficiary can lead to delayed payouts or even legal actions.
Ensure your beneficiary designations are accurate and up to date. For expert guidance, call an estate planning lawyer today.
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