When you open certain types of retirement, life insurance or other financial accounts in California, you typically have to name someone as a beneficiary of those accounts. That way, the party you designate receives the contents from the accounts when you die. However, you want to avoid a common estate planning error that many people make, which is making beneficiary designations and then forgetting to update or monitor them.
According to Kiplinger, avoiding the following beneficiary designation errors may make things easier for your loved ones after your death.
1. Over-relying on your will
While a will allows you to say who you want to inherit certain assets, you may need to take additional steps when it comes to accounts that have contractual beneficiary designations. A will may not have as much power as you think, and anytime you update your will, you may also need to consider updating your beneficiary designations.
2. Neglecting to plan for the unexpected
Another common error many people make when it comes to beneficiary designations is failing to plan for contingencies. For example, you may want to plan for what happens if one or more of the beneficiaries you name dies before you.
3. Failing to save all communications
When you update your estate planning documents or beneficiary designations, make sure to keep careful records of your actions. Make sure to store copies in a safe location, and try to have both electronic and paper copies available.
Avoiding the errors outlined above helps ensure your loved ones receive what you intend. It may also help prevent inheritance disputes and other interfamilial conflicts.