Now Is the Perfect Time to Make Sure Your Will and Beneficiary Information is Up-to-Date
The beginning of a new year is a good time to review your will and beneficiary information. Your life has probably changed in the last 12 months. Perhaps your family has expanded, or you’ve lost a loved one. Maybe you married, divorced, or developed a fondness for a new charity. One step you need to take now is to make sure your will and the beneficiary information on your insurance policies is up-to-date. Continue reading to learn why it’s so imperative that you do this now.
Property Transfers by Will, Contract or Operation of Law
All property is transferred at death by one of three methods, will, contract or operation of law. While most property is passed under the terms of a validly drawn will, proceeds from life insurance policies, retirement plan death benefits, and pre- and postnuptial agreements are always distributed by contract, according to the beneficiary designations on the policy or plan. Directions in your will have no effect on the distribution of this money. Therefore, it is important that the beneficiary information on these policies and plans is up-to-date, or the persons you intended to inherit these proceeds won’t receive them.
In addition to looking over your beneficiary information, now is also a good time to review your will (or create one if you don’t already have one). Under a will, you can transfer real estate, stock, a business interest, or any property you own to anyone you wish. If you die without a will, the state in which you live (or in some cases where the property is located) determines how to distribute it.
Although states’ distribution policies vary, usually a surviving spouse receives one-third to one-half of the property, and living children or parents receive the balance. This means that without a valid will, you cannot leave money to your favorite charities or to friends. And if you die without a will and without any living relatives, your property will revert to the state, which will designate it to institutions in that state. So, as you can see, it’s very important to keep the beneficiaries on your insurance policies up-to-date and have a valid will. Today is the perfect time to do it! Click here to download a Change of Beneficiary. |
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