Posted by: Heinz Brisske

Earlier this year, I posted comments in this space about the unintended and potentially disastrous results of an incomplete, inaccurate or non-existent beneficiary designation.

In the Personal Finance section of Forbes, Wendy S. Goffe, a trusts and estates lawyer in Seattle, makes the same point and sets out “The ABCs of Beneficiary Designations.” For anyone who has any misconceptions about the importance of beneficiary designations or the dire consequences that accrue when those designations aren’t completed correctly, should read that article. Ms. Goffe makes the point that “Nonexistent, incomplete or inaccurate beneficiary designations can leave already grieving heirs with a lot less dough and a lot more grief.”

The article sets forth some simple rules about retirement plan beneficiary designations, and leaves us with a list of suggestions, all of which the attorneys in the Life & Legacy Planning Group of Huck Bouma emphasize with our clients on a regular basis:

  • Name a primary beneficiary;
  • Name a successor beneficiary;
  • Don’t name your estate as beneficiary;
  • Review your beneficiary designations annually;
  • Update your forms more often than annually if there has been a change in your personal or family situation; and
  • Each time you change the form, be sure to send it in and seek an acknowledgement of receipt.

As with so many other things, the devil is in the details. We strongly suggest that your retirement plan beneficiary designations be completed only with the advice of your estate planning attorney. The consequences of a mistake in this area are far too serious to take for granted. Many of you have hundreds of thousands of dollars in retirement assets. Is it really worth rolling the dice on that kind of wealth transfer?