Step 10

Homework: Who Gets What?


Remember that each beneficiary designation dictates the distribution of each account so make sure all of your beneficiary designations are current. Too often we list someone – then, life changes, people pass away, or relationships change, so your beneficiary designations may need to change too.

Beneficiary Designations
  • The best person to give you advice on naming beneficiaries is your legal advisor. He/she understands the big picture of your estate and knows what it is you are trying to accomplish.
  • Discuss with your attorney the option to add “per stirpes” or “by rights of representation” wording (the ability to include grandchildren if their parents predecease you) to a beneficiary designation.

Too often, people misunderstand and believe that once their will or trust is drafted, that takes care of everything and that beneficiary designations don’t matter because they have it all spelled out in their will or trust. But remember, a beneficiary designation acts like a little mini-will in dictating where each account gets distributed, so the account never references the will or trust for distribution instructions at all on most accounts unless the will or trust is listed as the beneficiary (and that may not be the best practice for tax reasons) or goes through probate because there was no beneficiary listed.

You need to consult your legal advisor for beneficiary designation recommendations – don’t guess!