Beneficiary Designation

When you sign up for insurance plans, such as life insurance or disability insurance, you are often asked to make a beneficiary designation. These beneficiary designation forms are not just standard forms, but critical and binding legal documents that will decide who should benefit when the plans pay off. Understanding how to choose or change your beneficiary designation is an important step in estate planning.

Chosing Beneficiary

Naming someone on your beneficiary designation form is more than just a financial decision, in that it can be quite the emotional decision as well. Some may feel the need to name every child they have as beneficiaries on their life insurance or disability insure so as not to hurt anyone’s feelings. However, by naming multiple people as primary or alternate beneficiaries, the individual’s true intent of giving to all can be interpreted by the bank or providers to give only to the primary beneficiary, unless they have passed away.

Beneficiary Designation Modification

A commonly held belief is that a beneficiary designation can be changed thru the usage of wills or trusts. Although a will may state that life insurance or a 401k plan be left to the person’s named in the will, these insurance plans or 401k plans will often recognize whomever is listed as the beneficiary on the beneficiary designation form. A 401k beneficiary, as well as IRA beneficiary, often are regulated by the plan’s custodians and held outside of the estate.

Help From a Beneficiary Designation Lawyer

Understanding your choice for beneficiary designation is an important step in protecting your assets and allowing your intended beneficiaries to receive what you wanted them to have. Confusion or misinterpretation of beneficiary designation can result in costly legal fees and delays due to litigation. By speaking with an experienced beneficiary designation lawyer, you can learn about the implications and consequences of naming 401k beneficiaries or insurance beneficiaries before its too late.