Financial Wellness

While we may not be thinking that something unexpected or tragic could happen to us, it is essential to be proactive in managing finances and assets to secure a brighter future for ourselves and our loved ones. One crucial aspect that often gets overlooked is keeping beneficiary designations up-to-date.

A beneficiary is someone you designate to receive your assets or benefits, such as life insurance proceeds, retirement accounts, investment accounts, and more, after your passing. The designation you make holds paramount importance, as it ensures your wishes are honored and your hard-earned assets are distributed according to your plans.

Here are a few key reasons why updating beneficiaries is vital:

1. Changes in Personal Circumstances: Life is constantly changing, and major life events such as marriage, divorce, the birth of a child, or the passing of a loved one can significantly impact your intended beneficiaries. By reviewing and updating your beneficiaries, you ensure that your assets go to the right individuals during various life stages.
2. Avoiding Probate Delays: Assets with designated beneficiaries typically pass directly to the named beneficiaries without going through probate. Probate can be a time-consuming and costly process, but with up-to-date beneficiary information, your loved ones can receive the benefits much faster and with fewer legal complications.
3. Preventing Unintended Beneficiaries: Failing to update beneficiaries may lead to your assets being distributed to unintended beneficiaries. Outdated beneficiary designations may include ex-spouses, former employees, or individuals who are no longer part of your life. To avoid this, review your beneficiaries regularly to ensure they align with your current intentions.
4. Maximizing Tax Benefits: Some beneficiary designations can have significant tax implications. By reviewing and updating beneficiaries strategically, you may take advantage of tax-saving opportunities, allowing your beneficiaries to receive more of the assets you intended for them.
5. Protecting Your Legacy: Your assets represent a lifetime of hard work, and updating beneficiaries helps ensure your legacy is protected and carried on by the individuals you choose. This process also communicates your wishes clearly, reducing the potential for disputes among family members.

To get started with updating your beneficiaries, follow these steps: 

1. Gather a List of Accounts: Compile a list of all your financial accounts and insurance policies that require beneficiary designations.
2. Review and Verify Existing Designations: Double-check the beneficiaries listed on each account and policy to confirm their accuracy and relevance to your current circumstances.
3. Make Necessary Updates: If you need to make changes, contact the respective financial institutions or insurance companies to update your beneficiary information. They will guide you through the process and provide any necessary forms.
4. Communicate with Your Loved Ones: Inform your chosen beneficiaries about their designation and keep them informed about any changes you make in the future.

Remember, keeping your beneficiaries updated is an ongoing process. Review your designations at least once a year or whenever significant life events occur.

By taking the time to update your beneficiaries, you are taking a vital step in securing your family’s future and ensuring your assets are distributed according to your wishes.

2 accounts you can easily update in less than 5 minutes:

• Fidelity 401(K) Retirement Plan: Log in< Click Accounts & Benefits< Select Update Your Beneficiaries & follow the online instructions
• Prudential Life Insurance provided by Diversified: Log in to UKG< Myself< Contacts< Click the contact blue link to edit or click the + to add < under designation check the box for Beneficiary