It is important to take time to update beneficiary designations on bank accounts, life insurance policies, investment accounts, IRAs, etc. While these are often adjusted alongside updates to wills and estate planning documents, it’s easy to overlook them. Take a moment to check that your designations reflect your current wishes—especially if it’s been a while since you last reviewed. A quick update now can ensure your documents stay aligned with your goals.

Real-Life Examples

Several years ago, we had a client who divorced and remarried. He then became terminally ill and passed away. He had several life insurance policies, one of which he failed to update the beneficiary from his ex to his new wife. After he passed, his ex-wife collected on one of his policies—a result he surely wouldn’t have intended.

In another case, a client started an IRA and initially listed his children as beneficiaries. However, as the account grew significantly over the years, he decided his spouse should be the primary beneficiary. Additionally, he felt that one adult child (originally listed as a beneficiary) would be better served with a more a structured inheritance rather than a lump sum

Best Practice

It’s a good idea to keep copies of the most recent beneficiary designations as well as a record of all the various policies and accounts you have. Make sure your spouse or someone else knows where the list is and what you have. An insurance company usually does not know someone has passed away until a beneficiary submits a claim. If no one is aware of a policy or account, it could go uncollected. 

To help locate a life insurance policy for a deceased person, the National Association of Insurance Commissioners offers a Life Insurance Policy Locator service for consumers.

If you have any questions or need assistance, please don’t hesitate to reach out to your Dent Moses advisor.