Many people in Florida don’t like thinking about estate planning and also believe that this topic is something that only needs consideration once. However, updates might be necessary as time passes and things change. Here is some advice from one financial planner about updating accounts.
When divorcing, this financial planner kept her IRA while her husband kept his. She listed her father as the beneficiary since her children were minors at the time. Though she counseled clients to ensure they had the correct beneficiaries on their accounts, she didn’t update her own IRA for 20 years. At this time, her children were adults while her elderly father had remarried after his wife passed away. If she had died, getting the funds to her children would have been much more complicated than it needed to be.
Account beneficiaries receive funds directly. These funds avoid probate, but it is more difficult to dispute any errors. This makes updating accounts especially important. To check who is listed as a beneficiary, one can call the appropriate customer service department. Changing an account beneficiary must sometimes be done in writing, and one may need a social security number and signature from a spouse if the spouse is not the beneficiary.
Some people may want to name a charity as a beneficiary. The charity can typically provide the appropriate instructions. Restrictions could apply in some cases, and a spousal consent form may also be needed.
Consider a scenario similar to the one this financial planner found herself in. For example, someone may name a parent as a beneficiary. If this parent married someone, the step-parent may be the recipient of funds if the benefactor and designated beneficiary both pass away. This hypothetical illustrates why updated estate planning is required. One may need to consult an attorney when making preparations.