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Making sure your 401(k)/IRA/insurance go to the right people!

by Michele Malloy

The Wall Street Journal published an article entitle “When Your 401(k) Has a Bad Heir Day.” It used an example of a New Jersey executive whose wealth was substantially in his 401(k). Although he intended for his children to inherit the 401(k), he had not updated his beneficiary designation form, nor had he asked his new wife of two months to sign a waiver. As a result, the new wife got everything and the children nothing.

Two more examples from the article: an executive with four children had given a great deal of money to one of them. He told all four of them it would be unfair for her to receive anymore, but died in a car accident before changing the beneficiary designations on his retirement accounts. And a woman named her live-in boyfriend as the beneficiary of her IRA. She later moved and married someone else, but did not change the beneficiary designation before succumbing to cancer.

Remember, not everything you own is controlled by your Will. The 401(k), IRA and your insurance all depend on beneficiary designations. IF you aren’t sure what your beneficiary designation says, just call and ask for a copy. While you are at it, ask for a new form as well. And fill it out and send it back in, so that those parts of your hard-earned money will go to where you actually want them to go!

As for everything else you own, be sure to have an up-to-date Will. The new Texas Estates Code became effective January 1, 2014. Give me a call if you would like for your existing Will to be reviewed to be sure it is exactly what you need and want.


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