Why It's Important to Keep Your Beneficiaries Up To Date

— Mary Anne Vance, Attorney at Law


Without incurring legal fees, you can improve your estate plan by simply verifying the beneficiary designations you made for your Individual Retirement Accounts (IRAs), 401-Ks, annuities, life insurance policies, and bank accounts with "pay on death" designations. Most people do not have a copy of their beneficiary designations, and they should. If you do not have a written copy of each of your beneficiary designations, contact the company holding the funds and ask for a copy. If you named your beneficiaries many years ago, you may be surprised by your choices. If you want to change the primary and contingent beneficiaries, do so immediately because your Will does not override these designations.

Consider the following scenario: When she was 23 years old, Helen began her first day at the Busy Bee Corporation in 1974 signing a package of boring personnel forms. She named her mother as her beneficiary, who would receive her pension and life insurance benefits when she died. Thirty years later, Helen, now a wife and mother and still working at the Busy Bee, dies never having added her husband and son as beneficiaries.

Helen's mother now suffers from dementia, lives in a nursing home and is financially supported by the government through Medicaid. Though Helen's husband may have a claim to a portion of her death benefits, a portion of the money will be paid to her mother and immediately claimed by the government as reimbursement for her past cost of care. Though Helen's Will left her estate to her husband, the Will does not override her 1974 beneficiary designation.

Helen's story is not uncommon. Most people do not look at their beneficiary designations after they make the designation. You may have named a sister as your beneficiary and she has since died or you may have named a former boyfriend. Failure to keep the designations current causes heartache and strife after the person dies. You and your life are unique and ever-changing, which is why periodically reviewing and updating your beneficiaries is an important and necessary part of your estate plan.

Checklist to help you review and update your beneficiary designations:

1. Contact each company that holds your IRAs, 401-Ks, annuities, life insurance, and bank accounts.


2. Obtain a written statement from the company confirming your beneficiary designations. If you do this online, PRINT the written statement for your paper files.


3. Decide whom you now want to inherit each of these valuable assets.


4. Submit the "change of beneficiary" form if appropriate. Be careful to clearly designate the primary (first choice), and secondary (second choice) beneficiaries.


5. Remember, if you name two beneficiaries and one dies, the remaining surviving beneficiary (and not the deceased beneficiary's children) may inherit the entire account.

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Contact me if you have specific questions or would like to schedule an appointment.

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Seattle, WA Estate & Trust Lawyers

Mary Anne Vance
Reed Longyear Malnati Corwin & Burnett
801 2nd Avenue, Suite 1415
Seattle, WA 98104
(206) 624-6271

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