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Many individuals do not realize that a beneficiary designation overrides the provisions in a will. So it is extremely important to check your documents name beneficiaries are correct such as your companies pension plans, IRA, Roth, insurance policies, bank accounts and so on.
It is advisable to check your documents on an annual basis though personally I feel safe with every three years or if there are major changes to your situation such as a divorce.
If you are concerned about how the assets will be used or squandered than a trust might be a solution. It is recommended that you name “trustee under my will” as beneficiary of retirement assets, in order to provide more control over distributing the assets.
Don’t forget that in addition to retirement accounts, you can name a beneficiary with savings and investment accounts. These accounts can be structured as transfer-on-death (TOD) also referred as “Totten Trust or payable-on-death (POD).
TOD or POD is not recommended for large estates or multiple beneficiaries as that can tend to become unwieldy.
By checking your named beneficiaries, you can review your intentions to make sure that the passing of your assets will happen as intended.
Remember it is much easier to fix problems or mistakes while you are alive rather than the courts or beneficiaries to struggle to make things right.
Daniel Iuculano
Financial Planner
