Oct 19, 2008

Fall Clean Up: Check Your Beneficiaries for Retirement and Life Insurance

It's autumn. Your kids are in school, the garden needs cleaning up, the leaves are turning beautiful colors, it's time to get that Halloween costume ready, and -- one more thing -- take a moment to make sure that your beneficiary designations are up to date.

It's open enrollment season, so that's a great excuse to take a look and see who you've named as your beneficiaries for your retirement plans and life insurance policies. Many people forget to do this, leaving out children, or worse, naming ex-spouses.

This can be a big deal: for many people these are some of the largest assets you'll leave behind at death. And your will or trust doesn't control where this money goes after you die -- it's that beneficiary form that matters in most cases. While some states do have laws that automatically revoke some estate planning documents naming ex-spouses, it's just a better idea to make sure that yours are up to date.

You should check to make sure you've still got the right people named for all of the plans listed below at least every two or three years or when you've had a major life change (been divorced, or had a new child for example):

  • Pension plan accounts
  • 401(k), 403(b) or 457 plan accounts
  • Self-employed QRP/Keogh plan accounts
  • Individual retirement accounts (IRAs)
  • Credit union plan accounts
  • Disability insurance policies
  • Life insurance policies
  • Annuities

To learn more about choosing and naming beneficiaries, see Plan Your Estate, by Denis Clifford (Nolo).