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The Importance of Reviewing Your Beneficiary Designations Annually Thumbnail

The Importance of Reviewing Your Beneficiary Designations Annually

Financial Planning

Life is full of changes, both big and small. From the joyous occasion of a birth to the sorrowful event of a death, these moments shape our lives and require us to adapt our plans accordingly. One crucial aspect that often gets overlooked in the midst of these changes is reviewing and updating your beneficiary selections. Whether it's for life insurance, pension plans, IRAs, or other financial assets, taking the time to reassess and make necessary updates is essential. In this article, we will explore why reviewing your beneficiaries annually is so important and provide you with a step-by-step guide on how to check your beneficiary designations in the Seaside portal. 

Why Review Your Beneficiary Selections? 

Life is unpredictable, and circumstances can change in an instant. By reviewing your beneficiary selections regularly, you ensure that your assets are distributed according to your wishes, even if your life takes unexpected turns. Here are some common scenarios that highlight the importance of keeping your beneficiaries up to date: 

  1. Marriage and Divorce: Getting married or divorced can significantly impact your financial plans. By reviewing your beneficiary designations, you can ensure that your assets go to the right person in the event of your passing. 
  2. Birth and Adoption: Welcoming a new child into your family is an exciting time, but it also means you need to update your beneficiaries to include them. Similarly, if you adopt a child, it's crucial to reflect this change in your beneficiary selections. 
  3. Death of a Beneficiary: If one of your primary beneficiaries passes away, it's essential to have contingent beneficiaries in place. Without contingent beneficiaries, your assets may be transferred to your estate, and state laws will dictate who receives them. 
  4. Change in Family Dynamics: Family dynamics can change over time due to various reasons, such as estrangement or reconciliation. Reviewing your beneficiaries allows you to ensure that your assets align with your current relationships and wishes. 
  5. Estate Value Changes: If the value of your estate changes significantly, it's important to reassess your beneficiary designations. This ensures that your assets are distributed proportionally and in accordance with your updated financial situation. 
  6. Name and Address Changes: People change their names and addresses for various reasons, such as marriage or relocation. It's crucial to update your beneficiary information to reflect these changes and avoid any complications in the future. 

How to Review and Update Your Beneficiaries 

Now that you understand the importance of reviewing your beneficiaries, let's discuss how you can go about doing it. For any accounts that we manage for you, please watch the tutorial below to check your beneficiary designations. If you need to make a change to your beneficiary designations, please let us know and we will take care of it right away. 

For any accounts that we do not manage for you, you will need to review it and make the changes on your own. These accounts include 401(k)s, any other retirement sponsored plans, and life insurance policies. 

Also, make sure to review your living trusts and work with your estate planner to make any adjustments that are needed.  


Conclusion 

Reviewing and updating your beneficiary selections annually is a crucial aspect of proper estate planning. By taking the time to reassess your beneficiaries, you ensure that your assets are distributed according to your wishes, even in the face of life's inevitable changes. Seaside is happy to help you make these important adjustments or be a thought partner to you as you evaluate your estate planning documents. Don’t delay any further – take action now. 

This commentary reflects the personal opinions, viewpoints and analyses of the Seaside Wealth Management, Inc. employees providing such comments, and should not be regarded as a description of advisory services provided by Seaside Wealth Management, Inc. or performance returns of any Seaside Wealth Management, Inc. client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this commentary constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Seaside Wealth Management, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.