Love Means…Check Your Beneficiaries

philly-love-2013-photo-by-dct Love means that you should check your beneficiaries. Establish a regular time of year to do this. Between February 1-14 sounds good to me. Maybe in alternate years, but begin soon, if you don’t already do this.

What documents should you review?

Employment Related Documents

Your current company retirement plan: 401k, 403b, 457, pension, HSA, or company provided life insurance. If self employed, your SEP, Profit Sharing, SIMPLE, solo 401k, IRA, Keogh plan (for older readers), or Defined Contribution or Defined Benefit plan.

Your previous employer’s retirement plans, if not consolidated into a new Rollover account. Reminder: don’t lose track of old retirement plans! Here is one link to try if you have lost track of one.

Which payout did you select for the retirement plan, the joint and survivor or the single life payout? I knew someone whose monthly income dropped 66% after their spouse died, due to the spouse taking ‘single life payout’, on not one but two different pensions. Please schedule a robust conversation with your spouse about this, well ahead of your deadline to choose a survivor benefit. Enter the conversation with good intentions and an ear for the emotions involved as well as the numbers.

Personal Documents

Documents from the last century, related to a previous marriage, or that first IRA you opened up right out of college. (You did that, right?) Life insurance you hold that was purchased for you originally by your parents (when you were single). Life insurance purchased while in your child-rearing years. Or, now that you are single again, dig out the list of things you were going to change after the divorce was final.

Here’s a link with suggestions for finding an old life insurance plan. This article from Consumer Reports also highlights the popular site www.missingmoney.com where.  you can search for reported abandoned property. People I know have found utility deposit refunds, last employer paychecks, old bank accounts, uncashed dividend checks etc.

Transition Related Documents

Did someone else pass away and leave you assets? This could mean changes of your beneficiaries, or changes in your wills. Did you become a parent, or parents for the first time, or for the fifth time? Did you blend two families?

Was there a layoff or period of unemployment? You may wish to redirect your assets closer to home.  Was there a windfall? Did you win the lottery or get a very large bonus? Do you wish to give to charity or become a first time philanthropist?

Love means you are willing to review what would happen to your family when you are gone. Give your beloveds (and you) the gift of a review and doing some homework regularly to ensure your assets are distributed correctly. Remember, it’s great to have your intent known verbally,  but also review your beneficiaries to see that your goals and your documents match.

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Filed under Be Prepared, February Financial Task, For Love or Money, Life and Death, Uncategorized

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