One term you might hear at Annex Wealth Management is “mish mash.” That’s what we call the situation when a potential client comes to us with a lifetime of ideas, investments or plans they hoped to cobble together to be a financial plan. What people who have a “mish mash” discover is that it’s hard to manage, often disorganized, difficult to update and track, and could have negative effects on reaching their goals.
We sometimes see a “mish mash” occur with estate planning and beneficiary designation. The negative effects of not having coordination and organization can be severe. The best gift you can give your family is a clean and easily-executed estate.
- You may have a well-crafted estate plan – and if you don’t, make sure your advisor has a team of professionals ready to help you, like we do at Annex Wealth Management – but one common error occurs when investors have the option of naming beneficiaries directly on a wide range of financial products.
When the account owner dies, the assets go directly to the beneficiaries named on the accounts, bypassing the sometimes-long-and-costly probate process.
Because these beneficiary designations override your will, they need to be carefully coordinated with your overall estate plan.
- Our Financial Planning team tends to recommend reviewing all of your beneficiary designations regularly, but certainly after you experience a life-changing event, such as a marriage, divorce, birth or death of a loved one.
***That includes job changes and retirement. Beneficiary designations on retirement plans don’t carry over when you roll a 401(k) to a new employer’s plan or to an IRA, or when you convert a regular IRA to a Roth IRA.
