Tax season provides the perfect opportunity to conduct a comprehensive review of your financial affairs., and one crucial, yet often overlooked aspect is the verification of account titles and beneficiary designations. While gathering your tax documents, take a moment to perform this essential annual check-up that could save your loved ones from future complications.
Life’s constant changes make regular beneficiary reviews necessary. Marriage, divorce, birth and death can significantly impact your previously designated beneficiaries, and your assets might not transfer according to your current wishes without regular updates.
Consider Sarah, who discovered her ex-spouse was still listed as the beneficiary on her retirement account five years after their divorce – a situation that wcould have led to unintended consequences had it gone unnoticed.
The process is straightforward and can be completed while reviewing your tax information. Start by creating a list of all your accounts that have beneficiary designations, including:
● Life insurance policies
● Annuities
● Retirement accounts (401(k)s, IRAs, pension plans)
● Investment accounts
● Bank accounts with transfer-on-death provisions
● Property titles with rights of survivorship
This annual review also presents an ideal opportunity to evaluate and update other crucial legal documents. Take time to examine your:
● Last will and testament
● Living trusts
● Real estate titles
● Business ownership agreements
● Power of attorney forms
● Healthcare directives
Consider whether your charitable giving goals have changed as well. Perhaps you developed new philanthropic interests or want to adjust the distribution of your charitable contributions. This review period allows you to align your beneficiary
designations with your current charitable intentions.
Remember that beneficiary designations typically override will provisions, making their accuracy particularly important. For example, if your will leaves everything to your children but your IRA still names your sibling as beneficiary, the IRA will go to your sibling regardless of your will’s instructions.
By incorporating this beneficiary review into your annual tax preparation routine, you create creates a reliable system for maintaining accurate records. This simple step can prevent future complications and ensure your assets transfer according to your wishes.
Make it a yearly habit to protect your legacy and provide peace of mind for both you and your loved ones. Take action now while you have your financial documents at hand. Your future self – and your beneficiaries – will thank you for your diligence.
Need help navigating this financial review process or organization of your critical documents? Reach out to Jill Wisehart, Life Transition Specialist: (Mobile) 720-362-0844 or visit www.ExitElegantly.com.
As seen in My Prime Time News, March 2025.
