Estate Review – Beneficiary Designations
Why Your Beneficiary Designations Matter | Gainline Financial Partners
Most people assume their will controls who inherits all of their assets. But for retirement accounts, life insurance policies, and some investment accounts, that isn’t the case. Whoever is named on the beneficiary form gets the assets, regardless of what your will says.
In this video, Emily Bandoni, CFP®, Director and Wealth Advisor at Gainline Financial Partners, breaks down what every account owner should know about beneficiary designations.
Beneficiary designations vs. your will
A will outlines how you want any assets owned in your name alone (probate assets) distributed, but beneficiary designations can take precedence for accounts like retirement plans, life insurance policies, and certain investment accounts (non-probate assets).
Beneficiary designations override your will
If your will names one person but your beneficiary form names another, the beneficiary form wins. This applies to all non-probate assets.
Review after every major life event
Major life events like marriage, divorce, a birth, adoption, or a medical diagnosis or death in the family are all reasons to pull up your beneficiary forms and confirm they still reflect your wishes. An outdated form is one of the most common estate planning oversights we see.
Know the difference between primary, contingent, and per stirpes
- Primary: first in line to receive the asset
- Contingent: receives the asset if the primary beneficiary cannot
- Per stirpes: a deceased beneficiary’s share passes to their descendants
Name the individual
Be specific when naming beneficiary designations. If you don’t name each person individually and instead use a designation like “all my children,” it can create confusion or delays when it’s time to claim the assets.
Make it a yearly habit
Review your beneficiary designations at least once a year, and after every major life event. It only takes a few minutes, and it can save your family from unintended outcomes down the road.
Have questions about your own beneficiary designations? Our team is happy to walk through them with you. Reach out at team@gainlinefp.com or 720.548.4391.