February 24, 2017

Investments - Review Your Beneficiary Choices

Periodically reviewing your beneficiary choices is an often overlooked part of sound financial plan management. In a nutshell, beneficiary designations determine where your IRAs, pensions, trust funds and life insurance payouts will go should you pass.

When you first open any account of this type, you are required to fill out a form that designates who will benefit, should you not live to use them yourself. Typically, spouses are listed first, followed by family members, close relatives, business partners or organizations. But life delivers changes. Marriages end. Spouses pass away. Circumstances change. And simply updating your will does not automatically pass along beneficiary changes to these other assets.

In most cases, IRAs, pensions and insurance policies are not subject to probate. But if the beneficiary you have designated has preceded you in passing, that account might well end up there. And if you’ve recently gone through a divorce, you probably wouldn’t want an ex-spouse to inherit a trust fund you really wanted to go to your children. It often happens.

Tax time is a great time to take stock of many financial details. Make sure a look at your beneficiary designations is part of your annual investment plan review.

Contact Lake Michigan Investment Services by going online to lmcu.org/investments, or call (616) 234-6524 for a free, no obligation financial review of your unique situation.