Have Your Clients Checked Their Beneficiary Designations Lately?

Updating a plan’s beneficiary designations might seem like a simple process–and it often is. However, it’s a process that’s often overlooked. Clients who participate in ERISA plans should be reminded that they’re required to complete their beneficiary designations in writing, using the procedures and forms established by the specific plan, in order for those designations to become effective. Often, survivors can be surprised by the beneficiary designated by the plan—and may even try to argue that the decedent’s will should govern who receives the account funds. Clients should remember that wills and state intestate laws do not govern who receives plan funds.

The only consideration will be who the account owner has designated under plan procedures. It’s important to carefully evaluate the plan’s policies, however—because some plans have exceptions in place to, for example, automatically revoke a beneficiary designation upon divorce. For more information on the importance of checking beneficiary designations and updating on major life events, Read More

William Byrnes