Failing to change beneficiaries on all accounts. Oftentimes, when we change jobs, we get so wrapped up and focused on the new job, we tend to forget about our old 401(k) plan. In fact, many people tend to leave their 401(k) with their old employer, claiming that they'll deal with it later. Unfortunately, in many cases "later" gets pushed back further and further until they are, one day, forced to review the beneficiaries.
Why bring this up? Imagine that when you were single, you left your 401(k) with an old employer. It just so happened at the time you signed up for that 401(k), you listed your boyfriend/girlfriend as your beneficiary. Time passes, you broke up and eventually got married to someone else. You became busier with work, had kids and forgot about that old 401(k).
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Because you forgot about that old 401(k) and did not change the beneficiary to your spouse, your ex-boyfriend [or] ex-girlfriend would get the money if you were to pass away. A general rule of thumb to prevent this from happening is [that] whenever you have a life event (e.g., marriage, death, divorce, children [or] change of employment), review the beneficiaries on all of your accounts.
Listing beneficiaries incorrectly. Surprisingly, this happens more often than you'd think. One way it can [happen] is the account owner just sees the words "beneficiary information" and mistakenly titles everyone as a primary beneficiary (versus the intent that was to list one person as a primary beneficiary and the remaining people as contingent beneficiaries).
Another common error is when the beneficiary form doesn't have enough space to list all of the names of the beneficiaries (i.e., it only has space for two entries, when you really have three intended beneficiaries).
A financially astute person would normally include a separate sheet to list the beneficiaries they weren't able to add on the form, but a person who's not as financially savvy may list as many people as the form allows and assume that the listed beneficiaries will pass the money along to the people who weren't listed.
Not listing beneficiaries as per stirpes. What many people don't know is that unless you specifically designate a beneficiary per stirpes, you are more than likely designating that beneficiary per capita.
Per stirpes is a legal term in Latin. An estate of a decedent is distributed per stirpes if each branch of the family is to receive an equal share of an estate.