People in Florida who are creating an estate plan might not think about beneficiary designations as part of that plan. Beneficiary designations are used with assets such as retirement accounts and life insurance policies to name an heir for those assets.
One woman named her father as the beneficiary of her retirement account after she divorced her husband while her children were still very young. Her reasoning was that her father could use the money to take care of her children after she died. However, years later after her children were grown and her father had remarried, she discovered that she had never changed the beneficiary from her father to someone else. This could have caused problems for her family if she had died without making a change.
A person can typically check on the beneficiary for accounts by phoning the customer service department of the company responsible for the account with the account information at hand. Removing a spouse as a beneficiary might involve getting the spouse’s social security number, signature and permission in writing. Anyone can be named as a beneficiary, including a charity. Beneficiary designations bypass probate, so heirs get the assets more quickly than assets from a will.
Beneficiary designations also override a person’s wishes as expressed in a will or trust. For this reason, it can be particularly important to make changes in the beneficiary after major life events. One common error is leaving an ex-spouse as a beneficiary. The death of a beneficiary could be another complication although it may be possible to name contingency beneficiaries in the event that this happens. In some cases, a person’s relationship with a beneficiary or their life situation might change in a way that causes them to name a new beneficiary. Beneficiary designations should also be considered in the light of overall estate planning.