Naming beneficiaries for important things like assets and life insurance policies involves a more nuanced decision-making process than many might think. There can be significant repercussions for loved ones if people get something wrong. It is important for people to familiarize themselves with the basic requirements for naming beneficiaries. Keeping beneficiary designations up-to-date is extremely important, and people should review their designations in their estate plan whenever any major life event happens. There are also tax consequences which people should consider. People should be specific about beneficiary designations when dividing assets, and should give special considerations to special-needs loved ones. It is important to be familiar with all the important aspects of estate planning so that difficult problems in the estate probate process can be avoided.
See Christine Benz, How to Handle Beneficiary Designations, Morningstar, April 22, 2016.
