Estate Plan Checkup For August: Do you know who your beneficiaries are?

Assets such as IRAs, 401ks, life insurance, and annuities do not ordinarily pass to your beneficiaries under your estate planning documents.  Rather, they pass according to forms that are provided through the custodian or vendor of the asset under the terms of a contract.  The form is known as a beneficiary designation.  Because these assets are governed by a contract between you and the company that manages/sold the asset, they never find their way to your estate planning documents unless you designate your estate or trust as the beneficiary.

Long, long ago, you probably designated a beneficiary or beneficiaries when you purchased or signed up for the asset.  A common scenario is – spouse, primary beneficiary; children, contingent beneficiaries.

Many an estate plan has been undone by unanticipated, forgotten, unknown or a lack of beneficiary designations.  For instance, if your revocable trust owns an annuity, the annuity beneficiary designation governs; the annuity will not be distributed according to the revocable trust, but according to the terms of the beneficiary designation.

What can you do to avoid an unpleasant surprise for your family?  Check your beneficiary designations annually.  Keep a copy where they are readily accessible; not in a safe deposit box or in that expandable file in the garage where they will be forgotten, destroyed, or misplaced.  If they are conveniently available to you, you will not mind keeping tabs on them.

Questions?  Call Mary Jo Corsetti at 412-454-0228; or send an email to Mary Jo at