Beneficiaries – Your Obligation To Monitor

When you purchase a life insurance policy, write your will, or set up an IRA retirement account, you go through the process of naming a beneficiary to the account. It is on your mind and part of the process to set up the account and you take care of it. Hopefully, you have also named a contingent beneficiary in the event the first named beneficiary predeceases you. But time passes us all by and things change. Life changes with births and deaths and also with marriages and divorces. It may have literally been years since you looked at your documents and considered if your named beneficiaries are still fitting your needs and purposes.

I often ask “do you positively know, for sure, beyond any doubt, who are the primary and contingent beneficiaries of your IRA account?” I asked this question the other day and I could tell there was clearly a pause of uncertainty. What brought about this discussion was that a semi forgotten IRA account that had not been thought about for quite a few years had raised its head. (By quite a few years, I mean enough years had passed that he a gotten married, had a child who was now a teenager, was now divorced from the teenager’s mother, and has remarried.) Obviously, a large block of time has passed. (more…)