A will is important, but many financial accounts transfer by contract. The beneficiary listed on a retirement plan or insurance policy can control who receives the asset, even if a separate document expresses a different wish.
Old forms create real problems
Marriage, divorce, births, deaths, and family changes can make a once-reasonable designation outdated. Leaving the field blank can also send the account through a default process.
Reviewing the form takes minutes and can prevent years of conflict.
Primary and contingent have different jobs
The primary beneficiary receives the asset first. A contingent beneficiary matters if the primary person cannot receive it.
Percentage totals and legal names should be checked carefully.
A review is not legal drafting
Complex family situations, trusts, and minor beneficiaries can require professional advice. The practical first step is simply knowing what each account currently says.
A yearly review keeps the paperwork connected to real life.
Sources
- U.S. Department of Labor, Retirement Plan Beneficiary Information.
- Internal Revenue Service, Retirement Topics, Beneficiary.