Business & Finance Finance

Updating Your Beneficiaries Will Lessen the Heartache

If you do a simple Web search for "bizarre and unique holidays" you'll be entertained by what's out there.
For example, there's National Welding Month, National Picnic Month (this should not apply to ants), National Sleep Comfort Month, and of course, National Fight the Filthy Fly Month.
For those that are curious about how babies are made, there's Romance Awareness Month.
On a trip through Nashville last year, my wife and I discovered that September is National Biscuit Month.
After looking through the various holidays out there, I never came across a month dedicated to beneficiaries, so I'm unofficially declaring April as National Beneficiary Month.
I'm doing this as a public service because early on in my career, I happened to take a call from a customer whose husband had just passed away.
The widow was calling in because she thought that she was the beneficiary of her husband's 457 deferred compensation plan.
Sadly, her husband forgot to update his beneficiary designation on the account, and a very large sum of money went to his ex-wife.
As hard as she tried to get access to the money, the last I heard, the court could not help her.
The judge simply could not make assumptions and the woman wound up with nothing.
Now that your taxes are done, please take some time to make sure that your beneficiary designations are up to date on your 457 plan and other saving accounts.
Accounts like your checking, savings, and retirement plan, along with life insurance, should be carefully reviewed from time to time.
Although some jurisdictions are forgiving when it comes to unintended beneficiaries, don't leave things to the courts.
And while we're on the topic of beneficiaries, make sure that you put together a valid will.
Here are some handy things to keep in mind when it comes to wills:
  • You can write a will for absolutely no money at all so quit making excuses if you don't have one! For example, here in Illinois if you write a will and have your signature witnessed by two people, you'll likely have a valid will.
    I would make the will "self-proving" by having those signatures witnessed by a notary.
  • Name an executor: This is the person that will wrap up your legal and financial affairs after you pass away.
    Where do you want your money to go when you die? The kids? Charity? Your executor should follow through on your orders.
  • Name a guardian: This person will take care of your kids and can be the same person that handles their money
At some point, we all have to check out for good; it's simply the way of all flesh.
For those we leave behind, the least we can do for them is make things a little bit easier when we're gone.
One surefire way of doing this is to update your 457 plan and other account beneficiary designations.

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