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Colin OShea

June 12 , 2017

Investment Basics: Beneficiary Designations — Are Yours Up to Date?

INVESTMENT BASICS: BENEFICIARY DESIGNATIONS — ARE YOURS UP TO DATE?

Your will generally ensures that your estate property will be distributed the way you want after your death. If you don’t have a will, a court may decide how your assets are distributed. And the court’s decision may not be what you intended.

But not all assets pass through — or are governed by — your will. Some types of assets (“non-probate”) provide that you may designate a beneficiary to receive the assets when you die. So you’ll want to check your beneficiary designations on the following items periodically, especially if there are changes in your personal situation. Events such as marriage (or remarriage), divorce, births, or deaths warrant a review.

Your Retirement Plan Account(s)

When you joined your employer’s 401(k) or other retirement plan, you named someone to receive the account balance at your death. If you’re married, you may be required to name your surviving spouse unless your spouse signs a waiver allowing you to name someone else. Check all other employer-provided benefit plans, as each may have a separate beneficiary designation.

You’ll also want to review the beneficiary designations on any individual retirement accounts (IRAs) you may have. Generally, you can name anyone you want — not just your spouse — as beneficiary of a traditional or Roth IRA.

Life Insurance

You may own an individual life insurance policy. Or you may be covered under an employer’s group policy. In either case, you’ll generally be able to fill out a beneficiary designation form naming someone to receive the policy’s proceeds upon your death.

But That’s Not All

Other assets also may pass through beneficiary designations. Check into your ability to designate a beneficiary if you’re entitled to any of these benefits:

Stock options. You may be able to designate a beneficiary to exercise your options within a certain time after your death.

Employee stock purchase plan. You may be able to designate a beneficiary for any company stock purchased through automatic payroll deductions.

Deferred compensation plan. You can generally designate a beneficiary to receive benefits upon your death if you’re a highly compensated employee participating in a “nonqualified” retirement plan.

If you have any questions about your beneficary plan, contact Security National Bank Wealth Management by clicking below.

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