Setting up a retirement account or a life insurance policy can be an exciting step. In the case of a retirement account, you are making moves to ensure that you are set up for a comfortable life in the future. With a life insurance policy, you are making sure that your loved ones are provided for financially in the event of your death.
During the setup process of either a retirement account or life insurance policy, you will also make choices regarding beneficiary designations. This blog post outlines a few details to keep in mind when making these selections.
First, consider the age of your beneficiary. If you plan to leave everything to a minor child, know that minor children cannot receive inheritance outright. There are estate planning strategies to ensure that funds will be used for the the benefit of the minor child and a beneficiary designation should correspond with whatever strategy you choose to use.
Second, check your beneficiary designations periodically to make sure they reflect your current wishes. Over time, relationships and priorities change. Outdated beneficiary designations can result in funds ending up in the wrong hands.
Third, talk to an estate planning attorney if a trust is part of your estate plan. Depending on the structure of your estate plan, a beneficiary designation that directs funds to a trust may make more sense if you have concerns about your spouse remarrying or any unforeseen circumstances that may arise.
Disclaimer: The purpose of this post is to provide general information and a general understanding of the law, not to provide specific legal advice. By accessing this blog site you understand that there is no attorney-client relationship between you and Sekhon Law, PLLC. This post should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.