The Importance of Updating Beneficiary Designations

Life is pretty hectic. Between work, personal commitments and family, it’s no surprise that we sometimes let important things slide from time to time. We know we need to get to them, but the days get away from us and most of the time it seems like these little things can just as easily wait until tomorrow or the next day. Sound familiar?

When you sign up for health insurance, life insurance, a 401(k) or any other bank or investment account, you are normally required to list a beneficiary to receive the proceeds should you pass away. Oftentimes, people fill out the form and move on, sometimes even forgetting which beneficiary is on which account. Because of this, it is quite common for assets to go to people who are no longer the intended beneficiary, because many people have beneficiary designations that are out-of-step with major changes in their lives.

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Why does this matter? Because beneficiary designations supersede the terms of your Will! Assets with beneficiary designations are never even a part of the estate to be distributed per the terms of a Will. They pass directly to the individual listed as the primary or secondary beneficiary. This is great if you don’t want your loved ones to have to go through the probate process. Not so great if you don’t keep up with how each account or policy is titled.

Life changes fast, whether that is death, divorce, remarriage, birth, etc. Check your beneficiary designations from time to time to make sure they are what you intend them to be, especially after one of these major life events. Just as you should check all of your estate planning documents every few years—the same goes for beneficiary designations.

To avoid any heartache, it is best to update any beneficiary designations immediately after a change of life or family status, and to continue to review it periodically, so the beneficiaries do not become outdated or incorrect. Though no one likes to think about death, you can save your loved ones time and confusion by reviewing your beneficiaries regularly. Keeping your beneficiary designations up-to-date is an effective estate planning tool to build and maintain wealth. Designating beneficiaries when you set up your account is the easy part. Remembering to keep the documentation updated is the important part.

Ask Kit Kat: Zoo Loneliness

Hook Law Center: Kit Kat, what can you tell us about how zoo animals are dealing with the lack of attention from visitors during the pandemic?

Kit Kat: Well, as one might expect, some animals are doing wonderfully during this time, and some appear to miss the attention from visitors—let me explain. Comments for this article will be based on the experience of the Cape May County Zoo in southern New Jersey. It employs 20 full-time zookeepers and covers 52 acres. Though this is a county zoo, it has some famous inhabitants. The flamboyance (group) of Chilean flamingos that once inhabited Michael Jackson’s estate of Neverland, now reside there.

To get back to the subject at hand, however, which species seem to be enjoying the respite from visitors and which do not? As a whole, reptiles seem to be enjoying the break which began on March 16. Limited visitation resumed on June 13. When visitors like schoolkids pound on their cages to get a good look at them, reptiles seem to retreat even further. Sometimes at the height of a normal tourist season, they are so stressed that they don’t even eat.  However, with periods of extended quiet, reptiles can now easily be seen. 

The opposite seems to true for certain birds and some mammals. Birds actually thrive with human contact. Take for example, Gil, a gray cockatoo. He started to self-harm by plucking feathers from his chest, to the point where he gnawed a sore on his chest. He had to be outfitted with a protective vest which thoughtful zookeepers made to match the area he had denuded. Brat, a blue parrot, did not recognize his keeper, Janeen Moore, when she wore a mask over her face. She says he keeps trying to remove it from her face, as if to say, “That’s doesn’t belong there!” Otters, lions and even bison seem to miss their human visitors. Cape May County Parks director Ed Runyon comments, “Usually they (bison) don’t care about anything. But they were all coming right over and just staring at us as we were walking by.” 

So this is a unique time for all of us—humans and animals. We’ll get through it as best we can. Hopefully, better days are ahead! (Anna Peele, “The Gray Cockatoo Is Lonely Without You,” The Washington Post, June 24, 2020)

Posted in Senior Law News