Beneficiary designations
Naming a beneficiary, and making sure to update any named beneficiary, is an important estate planning step. If you do not name a beneficiary, Federal or state law may determine a beneficiary for you, which may or may not be your wish. For example, Federal law generally dictates that the beneficiary of a 401(k) or other qualified retirement plan is the account holder's spouse, unless he or she signs a notarized document allowing someone else to be named as beneficiary.
Retirement plans, life insurance policies, trusts and other accounts allow you to name a beneficiary. Many accounts allow you to select multiple beneficiaries, along with the dollar amount or percentage of the proceeds each would receive.
You can name beneficiaries for your assets in your will, but any beneficiary designiation on retirement accounts or life insurance policies generally overired any provisions in your will, including directions for funding trusts.
It is a good idea to review your designated beneficiaries from time to time. Significant life event changes, such as marriage, divorce, death, birth of additional children or grandchildren, etc. may give cause for reconsideration of beneficiary designations ro ensure equitable distribution of your assets.
