When you name beneficiaries for your retirement accounts, trusts,
bank accounts, brokerage accounts, life insurance, annuities,
etc., take the time to choose wisely. The person you name as
beneficiary automatically will inherit the designated funds. No
one else will get that money.
Suppose, for example, you create a payable-on-death bank account
and name your daughter Amber as the beneficiary. Further suppose
that, at your death, there is $50,000 in the account, as a result
of recent deposits.
Even if your will calls for all of your assets to be divided
equally between Amber and your son Brett, it makes no difference.
The $50,000 in the bank account goes to Amber.
Be especially careful with your life insurance, after a divorce.
If you don’t change the beneficiary designation, the insurance
proceeds probably will go to your ex-spouse, not to your children.
In case a divorce settlement requires you to maintain insurance
coverage, with your ex-spouse as beneficiary, make the change as
soon as you no longer are required to pay alimony or child support.
