Do you have a will that you've looked at in the past couple of years and updated if necessary?
That's important, but don't assume that it's enough to ensure that all your wishes are carried out in the event of your demise. It isn't.
Do you have a will that you've looked at in the past couple of years and updated if necessary?
That's important, but don't assume that it's enough to ensure that all your wishes are carried out in the event of your demise. It isn't.
What about the beneficiary designations on your qualified retirement accounts, individual retirement accounts, annuities and life insurance policies? Are those up to date and exactly as you want them to be?
It's very important to be aware of beneficiary forms. Naming the wrong people or failing to update those financial documents can create a mess for your heirs.
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A fact that people seem to miss is that these designations override wills. Many families have learned that too late, and to their detriment, after a loved one died believing that his or her will took precedence over everything.
If it's been years since you opened your accounts, you might not recall whom you designated as beneficiary on some of them. What if that person has died or others have been born since? What if your relationship has changed and you no longer want that person to get your money when you die? (Think marriage and divorce, the death of parents, birth of children or the breakup of an old friendship.)
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Regardless of what your will states, whoever is named as beneficiary on the various financial accounts mentioned above is who will receive those specific assets. Period. End of story.
But that's not the only costly mistake that is common in naming beneficiaries. Here are six others you'll want to avoid:
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You devoted a lifetime to accumulating assets, so make sure the disposition is managed the way you want them to be or your efforts could be for naught. That's why it's essential for you to take the time and the proper steps to work closely with an estate attorney and with your independent, objective financial advisor.
—By Ric Edelman, Special to CNBC.com. Edelman is the founder and CEO of Edelman Financial Services.