Annual Beneficiary Audits: As Important as a Will

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Many investors assume a will dictates where their assets will go. But without properly designated beneficiaries, investors may not reach their legacy goals.

A beneficiary audit is a simple but often overlooked estate planning tool for the successful transfer of assets to the desired beneficiaries while minimizing tax consequences.

Here’s why it’s important to do an annual beneficiary audit:

It helps achieve goals. Doing an annual audit helps investors achieve a wide range of legacy goals quickly, easily and at virtually no cost.

It reassesses beneficiaries. Things change, and so might an investor’s beneficiaries. An annual assessment will make sure the beneficiaries reflect current circumstances and wishes.

It can increase the value of a legacy.
An audit can help align certain types of accounts with the needs and tax situations of the beneficiaries designated on the account.

It’s specific. The audit includes the beneficiaries on qualified and nonqualified retirement plans, stock compensation plans, investment accounts and life insurance policies.

Many investors mistakenly believe that an up-to-date will is enough.

A will is important, but it doesn’t override beneficiary designations on retirement plans, IRAs, annuities, life insurance policies or brokerage accounts. In some cases, federal and state laws may govern the choice of primary beneficiary on these accounts — often a spouse unless he or she has provided a written waiver.

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