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Facts about beneficiary designations in Florida

On Behalf of | Nov 9, 2022 | Estate Planning

When you are creating or updating your estate plan, it is important to pay attention to your beneficiary designations to avoid any potential issues, such as your estate being distributed in a way that you don’t want. The first step, however, is to understand what a beneficiary designation is and how it can impact your estate plan.

What is a beneficiary designation?

A beneficiary designation is a document that helps to designate who will receive your assets upon your death. This can include things like life insurance policies, retirement accounts and investment accounts. The beneficiary designation form will list the primary and contingent beneficiaries for your assets. This document is usually created when you first open the account and then updated as needed, such as when you get married or have children.

How can a beneficiary designation impact your estate plan?

If you don’t update your beneficiary designations to reflect your current estate planning wishes, your assets may not get distributed the way that you want. For example, if you have named your ex-spouse as the beneficiary of your life insurance policy but you don’t update the designation after getting divorced, they will still receive the death benefit. This can cause problems if you have since remarried and want your new spouse to be the beneficiary.

What are some other things to keep in mind about beneficiary designations?

In addition to making sure that your beneficiary designations are up-to-date, it is also important to understand how they can impact your estate plan. For example, if you have a will, the beneficiary designations may override what is stated in the will. This is why it is so important to keep both documents up-to-date and in sync with each other. Additionally, if you have multiple beneficiaries, it is important to specify how the assets should be divided among them.

If you need to update your beneficiary designations, you will need to contact the account holder or company. They will usually have a form that you will need to fill out and return. Make sure to keep a copy of the updated form for your records.