5 Beneficiary Mistakes That Could Cost Your Family

Reviewing your beneficiary designations may take just a few minutes—but overlooking them could have lasting consequences.

In this episode, Miguel Gonzalez discusses some of the most common beneficiary mistakes people make, including failing to update beneficiaries after major life events, relying solely on a will, overlooking contingent beneficiaries, forgetting old retirement accounts, and assuming beneficiary reviews are a one-time task. Learn why periodic reviews are an important part of keeping your financial plan up to date.

Miguel Gonzalez is a Certified Retirement Counselor (CRC) with over 25 years of experience helping individuals and families design retirement income strategies and long-term financial plans. He is the Managing Partner of Cortburg Retirement Advisors, a boutique firm focused on retirement planning, investment management, and financial clarity.

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Welcome to Cortburg Speaks Retirement Podcast 
with Miguel Gonzalez, MBA, AIF®, CPFA®, CRC®

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Transcript

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Welcome to Cortburg Speaks Retirement

An audio podcast about investing in the stock market, financial planning, money management and retirement planning.  Each Wednesday, we help investors at all stages of life learn how to potentially grow and preserve their money from first job through retirement.

Now here is your host, Miguel Gonzalez.

 HOST

Good morning and welcome to the CORTBURG SPEAKS RETIREMENT audio podcast.   

One of the most important financial planning tasks can take just a few minutes—and it's often overlooked.

I'm talking about reviewing your beneficiary designations.

Many people complete beneficiary forms when they first open an account and never look at them again. But as life changes, those designations may no longer reflect your current wishes.

Today I'd like to discuss some of the most common beneficiary mistakes people make and why periodic reviews can be an important part of a financial plan.

1. Forgetting to Update Beneficiaries After Major Life Events

Life rarely stays the same.

Marriage, divorce, the birth of a child, the loss of a loved one, or even a remarriage may all create reasons to review beneficiary designations.

Many people assume these changes automatically update their financial accounts, but that may not always be the case.

Reviewing beneficiaries after major life events can help ensure your accounts reflect your current intentions.

2. Assuming Your Will Controls Everything

One common misconception is that a will determines where every asset goes.

In reality, certain financial accounts—such as retirement accounts and many life insurance policies—are often distributed according to the beneficiary designation on file.

Because of this, it's important to make sure these designations remain consistent with your overall estate planning goals.

3. Naming Only Primary Beneficiaries

Many individuals remember to name a primary beneficiary but forget to name contingent, or secondary, beneficiaries.

A contingent beneficiary may receive the assets if the primary beneficiary is no longer living or is otherwise unable to inherit the account.

Taking a few extra minutes to review both primary and contingent beneficiaries may help avoid unnecessary complications later.

4. Forgetting About Old Accounts

Over the course of a career, many people accumulate retirement plans from former employers, brokerage accounts, savings accounts, and insurance policies.

Some of these accounts may not have been reviewed in years.

Conducting a complete review of all financial accounts may help identify outdated beneficiary designations that no longer match your current circumstances.

5. Assuming Beneficiary Reviews Are a One-Time Task

Financial plans evolve, families grow, and priorities change over time.

Scheduling a periodic review—perhaps once a year or after a significant life event—can help keep important financial documents current.

6. Not Knowing Which Accounts Have Beneficiaries

Many people simply aren't sure which of their accounts include beneficiary designations.

Creating a simple list of your financial accounts and reviewing them periodically can make this process much easier.

In Closing

Reviewing beneficiary designations is one of those financial planning tasks that often requires very little time but can be an important part of keeping your financial affairs organized.

As life changes, taking a few moments to review your accounts may help ensure your beneficiary designations continue to reflect your current wishes.

This is Miguel Gonzalez, Certified Retirement Counselor (CRC) and Managing Partner, with Cortburg Retirement Advisors signing off for this week’s educational podcast.  

End of video disclosures:
CRC conferred by The International Foundation for Retirement Education.

 Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through Private Advisor Group, LLC, a registered investment advisor.
 
 

Private Advisor Group, LLC and Cortburg Retirement Advisors, Inc. are separate entities from LPL Financial.
 
 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
 
 

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.