Jeff Ritchie

May 02 2016

4 Beneficiary Designation Questions for Your Estate Plan


beneficiary designation estate planning

Beneficiary designations can be an important component of an estate plan.  Some common assets allowing beneficiary designations include: life insurance contracts, retirement plans (IRA, 401(k), etc.) and financial accounts (checking, savings, brokerage, money market, etc.).  POD (payable on death) or TOD (transfer on death) accounts are examples of accounts that use a beneficiary designation.

  1. Why is it important to review my beneficiary designations?
    Since a beneficiary designation overrides the provisions of your Will, it is important to make sure you review and update your beneficiary designations, if necessary, on a regular basis.  You should include your estate planning attorney in your periodic review of beneficiary designations to make sure the designations are consistent with the estate plan your attorney has helped you establish.
  2. What is the difference between a primary and contingent beneficiary?
    The primary beneficiary will receive the asset in question if he or she survives you.  Typically, if you have more than one primary beneficiary, the surviving primary beneficiaries will receive the asset.  The contingent beneficiaries generally do not receive anything unless all of the primary beneficiaries predecease you.
  3. How do I know who is named as my beneficiary?
    For financial accounts, you will need to contact the company where the account is held and request that they provide in writing a confirmation of your primary and contingent beneficiaries.  For retirement accounts, you will need to contact the plan administrator.  Again, you should request the plan administrator to send you a written confirmation of your primary and contingent beneficiaries.
  4. What if I do not complete a beneficiary designation form?
    For life insurance and financial accounts, the default beneficiary will typically be your estate.  This means the assets will become part of your probate estate and will be distributed according to the terms of your Will.  For most retirement plans (other than IRAs), the default beneficiary will be your spouse, if living, and otherwise your estate.

We invite you to contact a wealth management professional online or call 1-800-899-8858. We’d be happy to answer any questions about developing your estate plan or any other financial or retirement planning questions you may have.

Some trust products and IRA contributions/balances are not a deposit, not FDIC insured by any federal government agency, not guaranteed by the bank and may go down in value.
 
Jeff Ritchie

About Jeff Ritchie

Jeffrey Ritchie, JD is Vice President with Trust and Wealth Management at Hills Bank’s North Liberty location on Forevergreen Road. He has been at Hills Bank since 2005 specializing in personal trusts and estate administration. Jeffrey’s professional expertise includes estate planning and probate, real estate, and income tax preparation. Jeffrey earned his undergraduate degree at the University of Northern Iowa and continued his education at the University of Iowa College of Law. Prior to joining the bank, he practiced law in the Amana and Marengo communities. Jeff can be reached at 1-800-899-8858.


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