How to Make Sure Your Assets are Passed On

Designating a beneficiary tells a financial institution or benefit provider how to proceed after you die. Updating beneficiaries for all your financial accounts, policies and benefits, lets you minimize the stress and strain on loved ones who manage your estate and ensure your wishes are followed. Avoiding doing so may cause issues or delays in your estate’s distribution and increase legal fees. While planning for a time when you might not be around anymore is the last thing most people want to discuss, it is an important topic. It is also one of the most overlooked areas of financial planning and noted to be one of the biggest mistakes. To get started, we’ll cover a few essential tips to help ensure your assets are protected and you leave behind a legacy to the ones you love.

First, it is important to know that the beneficiaries you select for investment, retirement and insurance accounts may supersede what’s in your Will. This can also be the case in other accounts such as company benefit plans, annuities, life insurance policies, 529 College Savings Plans, bank accounts, brokerage accounts and retirement accounts. In all of these cases, the beneficiary designation determines where the money goes in the event of the account holder’s death. No matter what is specified in the Will.

Did you know that your Will could say your children get life insurance proceeds, but if the life insurance policy still has an ex-spouse listed as the beneficiary, the proceeds go to the ex? Be sure to review your Will after any important life-changing events occur. You may need to update your Will and beneficiary designation forms for insurance, retirement plans and other financial accounts whenever your life situation changes such as marriage, divorce, birth of a child, or death of a spouse or beneficiary. Advisors say account-holders who fail to make changes after a sole beneficiary’s unexpected death frequently cause beneficiary foul-ups. It is suggested to review your beneficiary designations every 3-5 years. This is not a “set it and forget it” task!

You can also reap tax benefits now if you plan to donate to a charity later. There are several ways you can lower your taxes while sharing your assets with others. For example, if you itemize income tax deductions, any contributions made to IRS–qualified, tax–exempt organizations are deductible. Visit www.irs.gov for more details.

If you do not have a plan for how your assets should be handled when you are gone, the process of getting your affairs in order can be expensive and time consuming. After all the court and legal fees associated with this process, it leaves less for your family and loved ones. You may feel like you don’t have enough assets to warrant the expense or the time to sit down and plan your estate, however, you are probably mistaken. Unfortunately, those who have less in assets, typically end up having more taken in fees through the legal process, leaving much less for loved ones.

In order to help ensure that you are leaving your estates and affairs in good standing and that your hard-earned assets are given to the people and organizations you want, it is a great idea to sit down with a professional and plan out your estate. Thankfully the experienced team at Rogue is here to help! Stop by your local branch or visit www.roguecu.org/learn for more information.