top of page

LET'S TALK:

  • Daniel Rodriguez

Why it’s important to pay attention to beneficiary designations

Most California residents understand the importance of estate planning to protect their assets and loved ones. If you’ve taken steps to start it, you probably have beneficiaries named. Paying close attention to your beneficiary designations is crucial.

Beneficiary designations and your financial accounts

Part of your estate planning involves naming beneficiaries on all your financial accounts. This might include your bank accounts, life insurance policy and retirement plans. Immediately upon opening these accounts, you are urged to name a beneficiary to inherit the money from them in the event that you pass away. However, many people make the mistake of naming a single beneficiary when they should name at least two. The second choice, your contingent beneficiary, will receive the funds from your financial accounts if your primary beneficiary dies before you.

When to update your beneficiaries

Certain situations call for updating your beneficiary designations. You should take this step any time something considered a major life change occurs such as first-time marriage, divorce or remarriage. If you’re newly married, you’ll want to add your spouse’s name to your estate planning documents. However, if you divorce, the opposite is true. In the event of a second marriage, you should remove your former spouse’s name and add your new spouse. Forgetting to do this can spell disaster; you don’t want your former spouse to handle your financial and healthcare matters if you become incapacitated or inherit assets you wish to leave to your current spouse or children.

If you have a new child by birth or adoption, it warrants updating your beneficiaries. Although minors cannot inherit assets, you can still name them in your estate planning documents and create a trust to hold assets and property for them that they can receive after reaching the age of majority.

Recent Posts

See All

Tech entrepreneurs and estate planning

As a California tech entrepreneur, you’ve invested countless hours, creativity and hard work into building your business. While your focus may be on scaling your company and achieving success, it’s eq

Estate planning and remarriage

Whether your first marriage ended because of a divorce or the unfortunate passing of your spouse, finding love again and remarrying often feels like a fresh start. However, California residents who re

Comments


Sacramento form background.jpg

Connect with an Attorney

Your business deserves a legal partner who understands your current needs and is equipped to evolve with you. NewPoint Law Group is ready to be that partner, ensuring that your legal foundation is as robust and forward-thinking at every milestone as your business itself.

Create, Grow, and Protect Your Business with NewPoint Law Group

bottom of page