The Importance Of Designating Your Beneficiaries

People do not like to talk about death, and understandably so. However, people die and it is important to make the appropriate preparations for it. It is very important to get a will so that your heirs or potential heirs will not fight over the estate or about end of life care. However, this article is not about establishing a will but about designating beneficiaries.

When a person dies and has assets in a bank account, retirement account, brokerage account, pension account, or another account the assets need to be allocated somewhere. However, many people do not take the time to designate a beneficiary or update who the designated beneficiary is. This is extremely problematic because you can have your assets going to an ex spouse while you were still married to a different individual because you did not update your beneficiary paperwork! You can also end up allocating assets to family members that were never meant to receive the funds. It is better to make these decisions for yourself rather than have the state make these decisions for you because you were too disinterested or lazy to designate a beneficiary.

You also need to designate who your life insurance beneficiaries are so that you do not have fighting in the family over those funds and so that lengthy unnecessary court battles can be avoided. Again, imagine how frustrated your spouse would be if your ex spouse got the life insurance funds because you did not update your beneficiary! Imagine if those life insurance funds were the only thing that could keep your wife and children from being homeless!

Do everyone a favor and designate your beneficiaries and keep them updated!

P.S: For those of you who have life insurance policies and wills you need to go ahead and let your beneficiaries know about them so that people can follow the terms of the will and so the life insurance monies do not go uncollected because the beneficiary did not know there was a life insurance policy due to them in the first place.