Financial To Do List

A Vital Financial Task In 2022

Financial Health

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I'm Financial Coach, NFEC-certified Financial Educator (CFEI), and café-con-leche fanatic with a passion to help CLOSE the gap in Financial Literacy through my business Wear Your Money Crown™.

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Preparing For The Unexpected

As we begin a New Year, there is a super important item we need to check off of our Financial To-Do list as soon as possible.

What is it?

It’s checking & updating our Designated Beneficiaries.

​This is particularly important if you recently experienced a Life Changing Event, such as getting married, divorced, or having a child. 

What is a Designated Beneficiary? 

A designated beneficiary is the person (or persons) we name on certain FINANCIAL Accounts & Insurances to be the recipient of the assets (or money), upon the death of the asset’s owner. 

To DESIGNATE a beneficiary, you will need their full legal name and also determine the percentage of your assets that will go to each beneficiary (if you have more than one listed).

What is the difference between a Beneficiary and a Designated Beneficiary? 

It’s quite simple, a Beneficiary is ANYONE who might receive a portion of your estate or property upon the owner’s death. Whilst, a Designated Beneficiary is an individual(s) who has SPECIFICALLY been named to receive an asset. This means that they have a CONTRACTUAL right.

Key Points:

  • In almost all cases, beneficiary designation overrides a Will. So, it’s a BIG deal!
  • Retirement accounts will typically offer a beneficiary form within the account itself.
  • If you have an Investment Account, you will need to fill out a TOD (transfer on death form)…this is also the case with most bank accounts.

What happens if I don’t assign a Designated Beneficiary? 

If for instance, you don’t do this in your retirement plan, then then it will go to what is known as the Default Beneficiary under the plan document (if there is one) or into Probate court if it goes to your estate. 

This is the thing…

Those types of processes, such as Probate, not only are lengthy but expensive! So, there would be a COST & DELAY in the distribution of your assets to your loved ones.

Take Action:

  1. Check whether you have current Beneficiary Designations on your Financial Accounts, such as retirement plans, brokerage accounts, banks, and insurances.
  2. Update them as needed, including the percentage allocation you’ve made.
  3. Speak to your parents & spouse (or anyone you would expect to inherit from one day to make sure they have completed this task as well).

Keep in mind that some JURISDICTIONS have specific laws governing retirement plans.

For instance, in some states spouses can be entitled to half of all the assets in an Individual Retirement Account (IRA) – even when there have been other beneficiaries listed – so make sure to research the laws in your state and country to ensure your money ends up going to the right people if something were to happen to you! 

One of the best ways to do this is to consult a LOCAL estate planning attorney.

 I know the above topic can be difficult at times to think about, but friends….

We have to be prepared for the unexpected!

We also need to ensure that those that wish to protect OUR Financial Future (parents, spouses, etc) have done these tasks as well.

Sending you the very best for this new year.

From my Crown to Your Crown, I salute you.

XOXO,

Anna

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GET MY FREE GUIDE TO FINANCIAL HEALTH!

Download my Top Tips for Financial Health guide and start ruling your finances today!

GET THE GUIDE

I'm Financial Coach, NFEC-certified Financial Educator (CFEI), and café-con-leche fanatic with a passion to help CLOSE the gap in Financial Literacy through my business Wear Your Money Crown™.

HI, I'M ANNA!

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