It is a good idea to have your beneficiaries clearly listed on any account in which the company asks for it, including your retirement accounts and your life insurance policy. Set aside a calendar reminder every single year to sign back in or to contact these companies and verify that the beneficiary information is still correct.
One of the biggest reasons for doing this is simply that your life may change. If you have not checked your beneficiary designation on your retirement accounts recently, you may find out that the designated beneficiary who is legally entitled to receive some or all of the benefits on your retirement plan if something were to happen to you is no longer accurate. This is particularly true if you have gotten remarried, gotten divorced, or had children since your initial retirement plan account was originally established.
For example, if you originally named a charity as your beneficiary, that charity may no longer be in existence. While many people have a reminder set to look at their wills every single year and update these materials, things that are written inside your will do not necessarily transfer over to your retirement accounts. At the same time, it is a good idea to make sure you also have contingent beneficiaries listed.
These accounts are held separately and therefore, the company is responsible for providing you with the beneficiary designations. In the event that something happens to you and you haven’t verified these accounts for years, the company is well within their rights to transfer the amounts inside your retirement accounts to the last known designated beneficiary. This could be a former spouse or someone else that you do not intend to receive these benefits.
Set a reminder every year so that you have the opportunity to meet with your Massachusetts estate planning attorney and talk about any other updates you need to make to your process.