Broker Check

Simon Says® Top 5 Reasons Why Clients Should Update Beneficiaries

August 25, 2020

You’ve all heard the cautionary tales.

An ex-spouse collects a death benefit that was intended for the current spouse. Along the way, fights break out. Lawsuits happen. Family members stop talking. And the biggest irony? The person who left behind the money, did so as an act of love. They never imagined that such chaos would ensue. Or maybe they mistakenly believed that their will would take of who gets what in the end.

It’s this simple. Simon Says to annually review your beneficiary designations & unnecessary hardship and misunderstanding can be avoided.

  1. Their money might not go to whom they intended
  2. Their will doesn’t always control who gets the money
  3. They may have forgotten to add (or subtract) a beneficiary
  4. They may not realize which life changes necessitate a titling update
  5. Their beneficiaries may be hit with larger tax bill than necessary

It’s not only about updating names. It’s also about reviewing payout options. When does a lump-sum payment make sense? When are you better off with an extended payout?

Ask yourself these difficult, but important questions.

  • Have you or any of your beneficiaries married/divorced/been widowed?
  • Do either you or your spouse have children from a prior marriage that you specifically wish to include or exclude as beneficiaries?
  • Are you still in contact with the beneficiaries you originally named? Have there been any fallings-out since our last review? Any deaths?
  • Do all your accounts have contingent beneficiaries listed in case your primary beneficiary (e.g., spouse) predeceases you?
  • Do the annuities you have meet your desired level of guaranteed income in retirement, as well as preserve a legacy you can leave to your loved ones?