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Facts about beneficiary designations

On Behalf of | Sep 5, 2022 | Estate Planning |

Estate planning refers to the process of preparing for the management and disposal of your assets after your death. One important aspect of estate planning in South Carolina is beneficiary designations.

What are beneficiary designations?

Beneficiary designations are estate planning documents that designate who will receive your assets upon your death. These assets can include bank accounts, retirement accounts, life insurance policies, and more. It’s important to keep your beneficiary designations up to date because they take precedence over your will. This means that even if your will says that your assets should go to a specific person, the designated beneficiary will receive the assets instead.

What’s the importance of having up-to-date beneficiary designations?

Having up-to-date beneficiary designations is important for a few reasons. First, it ensures that your assets will go to the people you want them to go to. Second, it can help your loved ones avoid probate. Probate is the legal process of distributing a person’s assets after their death. It can be a lengthy and expensive process, so avoiding it can save your loved ones a lot of time and money.

Additionally, if you have minor children, it’s especially important to have up-to-date beneficiary designations. This is because minors can’t inherit assets directly. If you don’t have a beneficiary designation in place for your minor children, a court will appoint a guardian to manage the assets on their behalf.

How do I update my beneficiary designations?

Updating your beneficiary designations is usually a simple process. You’ll need to contact the institution that holds your assets such as your bank, retirement plan administrator or life insurance company, and request a change of beneficiary form. Once you’ve completed and signed the form, send it back to the institution. It’s important to keep a copy of the form for your own records.

Whatever you do, always remember that things like marriage, divorce, birth and death can all affect who you want to receive your assets. That’s why it’s so important to review your beneficiary designations on a regular basis and update them as needed.