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250 Osborne Road, Colonie, NY 12205

Phone: 518-438-1835

 

Website: www.bonannofinancialadvisors.com

November/December 2021

Beneficiaries: Still the Ones?

Beneficiaries Still the Ones

Beneficiary designations name the person or persons who will receive the life insurance or retirement account proceeds upon your death.


Life events, such as divorce, remarriage, deaths, or births can all trigger the need to change beneficiary designations. Why? Beneficiary designations supersede any instructions in your will. If you fail to change a beneficiary, the original beneficiary you designated will receive the proceeds — even if you’ve named someone else in your will to inherit the account.


New Faces
As time goes on, you may want to name grandchildren as contingent beneficiaries. Contingent beneficiaries will receive the account proceeds if the primary beneficiary dies with you or before you. Alternatively, you might want to support a charity using life insurance proceeds.


Avoid Unintended Consequences
Let’s say your children are equal beneficiaries of your account, but what if one of your children dies before you? Under per capita distribution, your remaining children will share the account proceeds, potentially leaving the deceased child’s own children (your grandchildren) with nothing. By specifying per stirpes distribution instead, a deceased child’s share will go to his or her children.


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