DRW Financial
  • Home
  • Contact
  • Blog
  • Home
  • Contact
  • Blog
Search by typing & pressing enter

YOUR CART

12/16/2014

beneficiary review

The end of the calendar year is a good opportunity to review, adjust, and take some actions relevant to a financial plan or investment strategy.  This blog post is one in a short series examining a few of those items.  The information below is not intended as formal advice for any particular circumstance, but rather a general discussion of the topic.
Many people have a number of assets that require them to name a "beneficiary" -- this would be the person, people, or institutions that stand to inherit the asset when the current owner dies.  Trouble arises when folks choose the beneficiary and then forget to review that choice over time.  The end of a calendar year is as good a time as any to take a minute and revisit these accounts and the designated beneficiary / beneficiaries.

retirement accounts (ira, 401k, etc)

In very general terms, "retirement" accounts allow a person to save money during their working years with the benefit of deferring income tax on the (potential) gains within those accounts until retirement age (typically 59.5 or older for most types of these accounts).  When the account is opened, the owner is able to name one or many beneficiaries to inherit any remaining balance when the owner dies.  These beneficiary designations can be made by percentage (25% to one heir, 75% to another, for example), and there are options on making the designations per stirpes or per capita (consult your tax / legal expert for more info on the difference)

life insurance / annuities

As with retirement accounts, when a person purchases a life insurance policy, signs up for a workplace insurance program, or invests in an insurance product like an annuity, there is an option to name a beneficiary to receive the proceeds of the policy when the insured person dies.  And similarly as with retirement accounts, too often people set up these beneficiary elections and then forget about them.

checklist

Here are a few things to consider when reviewing asset accounts and insurance policies with beneficiary elections:
  • Have you experienced a significant change of life (marriage, divorce, new child, loss of a loved one, etc) that would suggest a change in your named beneficiary?
  • Have you considered the impact on your estate planning implied by current designations (IRA assets passed to children may be heavily taxed, for example)?
  • Is a charity / non-profit named as a beneficiary?  Has your relationship with that organization evolved in a way suggesting a change to the instructions?
  • Have you reviewed your beneficiaries and wishes with your financial team (adviser, accountant, attorney)?

Comments are closed.

    Author

    David R Wattenbarger, president of DRW Financial

    Archives

    January 2021
    November 2020
    May 2020
    March 2020
    February 2020
    November 2019
    August 2019
    September 2018
    February 2018
    December 2017
    November 2017
    March 2017
    February 2017
    October 2016
    September 2016
    January 2016
    November 2015
    September 2015
    June 2015
    March 2015
    December 2014
    October 2014
    September 2014
    August 2014
    June 2014
    May 2014
    April 2014
    January 2014
    December 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013

    Categories

    All Survey Video

    RSS Feed

Picture
FCL LLC (“DRW Financial”) is a registered investment advisor offering advisory services in the State(s) of TN, GA, IL, OK and in other jurisdictions where exempted.  Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute. Follow-up or individualized responses to consumers in a particular state by DRW Financial in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or pursuant to an applicable state exemption.
All written content on this site is for information purposes only. Opinions expressed herein are solely those of DRW Financial, unless otherwise specifically cited.  Material presented is believed to be from reliable sources and no representations are made by our firm as to other parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.

Forms ADV, Privacy Policy, and additional disclaimers may be found here