End of the Year Review: Are Your Finances In Order? Designate Your Beneficiaries!Written on November 20, 2014
At the close of the year, it is always good practice to review your yearly tax documents and yearly income to determine all the ways that you may qualify for a deduction. Reviewing your tax documents and yearly expenses is a great way to lower your costs and keep a handle on spending.
At the end of each year, you also want to make sure that your designation documents and insurance policies have been completely filled out. Have you updated your will in the last few years? Have you designated your beneficiaries?
At the end of each year, it is a good idea to check into who you assigned as beneficiaries for your insurance policies and retirement accounts. If you can’t remember, you’re not alone. But it’s worth checking! If you make the wrong decision, or haven’t updated it in many years, it will affect who inherits those assets. In some cases, it could also change the taxes your beneficiaries will pay and the value they’ll receive.
Here are some key facts about beneficiary designations:
- When you designate a beneficiary for an account, you are naming the person you want to inherit that account.
- Your written will determines who will inherit the assets in your estate. If you have an up-to-date will, your assets will go to the person or institution you named. This is why it is important to update your will and make sure it is accurate! It determines who will inherit the assets in your estate. Changing minor details of your will won’t change the beneficiaries. This kind of change can be overlooked unless an experienced attorney reviews it for you. If you have a life insurance policy or a retirement plan for which you have designated a beneficiary, that document controls to whom the assets in the plan will be distributed.
- In your will, you can designate as beneficiary a person or group of persons, a charity, a trust, or your estate. You will also want to designate a secondary or backup beneficiary in case the primary is no longer living. If you haven’t begun this process, The Silverbach Group can help you do that, and your CPA can assist you with tax structure.
- With an inheritance, there can be tax implications to the beneficiaries. With a traditional IRA, your choice of beneficiary can affect how quickly withdrawals must be made and how taxes are paid. That can change the value of the IRA to your beneficiary. An attorney can assist you with how to structure your estate.
You can make changes to your will and beneficiaries with the help of a Family Law Attorney:
If you want to make changes to your will, find copies of all your current designations. Contact us to make plans for trustees and beneficiaries. If you can’t locate the documents, The Silverbach Group can help you. Call 770-544-0522 in Cobb County, for a family law Attorney to help you with additional assistance and advice.