The Consequence of Not Updating Beneficiary Designations
While it may seem like a small detail, it is always important to update the beneficiary designations on financial documents from time to time. There are real and serious consequences for not updating the beneficiary information on financial documents.
If assets are distributed directly to the estate to be divided amongst the heirs there are costs associated with managing it. For some people whose retirement accounts are already worth hundreds of thousands, a 3% or 4% fee on estate asset quickly add up.
Here are events that you may want to update beneficiary information:
- Marriage or divorce
- Birth of a child or grandchild
- Death of a previous beneficiary
- When a minor beneficiary becomes of legal age to inherit
