Keeping a list of your accounts and beneficiaries goes at the start of any Estate Planning 101 course. If you don't know what you have and where it is located, how will anyone else? For my clients knowing what they have and where it is located is normally not the problem. However, I am often a surprised when they are unable to tell me the last time they performed a beneficiary audit.
What is a beneficiary audit? This would be the simple act of confirming, with each asset you own, who the listed beneficiary and secondary beneficiary are on your accounts. This homework, while easy, does take some effort, which is why I believe most people put it off. To complete an audit you would contact each bank, investment firm, insurance company, etc you have money with and ask them to mail you a current list of your beneficiaries.
Why do this? In the past I have seen families surprised to find their ex-spouse still listed; friends (who at one time would have been trusted to care for children who are now fully grown), deceased children, estranged children, children with poor judgment (likely to abuse themselves with money), etc… The stories are nearly endless. Certain changes in the law have helped such as the change regarding prior spouses; however, complete reliance on even the new statute would be naïve due to 10 clear loopholes in that law.
In the end your best protection of your goals for those to follow behind you is to know what you have, where it is located, and who stands to receive it when you pass. A beneficiary audit is a simple (free) way to help you become organized and informed.
Do you need help getting organized? We have a free organizer to help you get started. Let us know if you would like a copy.
Jason A. Waddell is a Board Certified Florida Elder Law Attorney who practices on the Panhandle of Florida.