Estate Planning: The Importance of Updating Beneficiary Designations~3 min read

Keeping your beneficiary designations up to date is an important part of protecting your estate and making sure your assets go where you want them to. Life changes such as marriage, divorce, or the birth of a child can make your original designations outdated, and failing to review them can cause unnecessary confusion and conflict later.

Why Beneficiary Designations Matter

Beneficiary designations determine who receives specific assets such as life insurance proceeds, retirement accounts, and payable-on-death bank accounts. These designations take priority over what is written in your will. If your estate plan and your account beneficiaries do not match, your loved ones could be left out or face legal challenges.

Common Life Events That Call for Updates

You should review your beneficiary designations whenever you experience a major life change. Events like marriage, divorce, the birth or adoption of a child, or the death of a loved one are common times when updates are necessary. Even changes in your financial situation or relationships can influence who you want to name as a beneficiary.

The Consequences of Failing to Update

If you forget to review your designations, your assets may go to someone you no longer want to receive them. For example, an ex-spouse might still receive proceeds from a life insurance policy, or a deceased person could remain listed as a beneficiary. Regular reviews help prevent mistakes and protect your wishes.

How to Keep Your Designations Current

It is a good idea to check your accounts every few years and whenever major changes happen in your life. Work with an attorney to confirm that your beneficiary forms are consistent with your will and trust documents. Keeping records organized and up to date can make a significant difference for your family’s future.

Contact Springer & Lyle

If it has been a while since you last reviewed your beneficiary designations, now is a good time to take another look. The attorneys at Springer & Lyle can help you update your estate plan so that it reflects your current wishes. Contact Daniel Abasolo at 940-387-0404 to schedule a consultation and learn more about how we can assist you.

Springer & Lyle is located at 1807 Westminster, Denton, Texas 76205

Frequently Asked Questions

1. Do beneficiary designations override my will?
Yes. The individuals named on your beneficiary forms will receive those assets, even if your will says otherwise.

2. How often should I review my beneficiary designations?
Review them every few years and after major life changes such as marriage, divorce, or the birth of a child.

3. Can I name a trust as a beneficiary?
Yes, you can name a trust to help manage how and when your assets are distributed.

4. What happens if I do not name a beneficiary?
If no beneficiary is named, the asset may become part of your estate and go through probate, which can delay distribution and add costs.