What is the title of that account? | | Luderware

My husband recently opened a new account with one of the online DIY investment firms. He promises that for the small amount of money I was going to allow him to experiment, he will make us a lot of money. , asked to show me what he did. He showed me all the fancy websites and various gadgets and graphs showing how our money was invested and I asked a quick question. My husband, who has an engineering degree and she’s one of the most intelligent people I know, turned to me and said, “Don’t you get it?”

In many cases, when a new account is created, the account title and beneficiary designation are lost in the shuffle, regardless of the account type or financial institution. The online investment firm just had a blank space that said “name” and didn’t ask me if I wanted to include another account holder or list the beneficiaries in the account. (I couldn’t even find a place on the website where I could add an account holder.) Also, the account pops up with a beneficiary designation form so quickly that I don’t even remember filling it out. For example, when you first get life insurance or start a new job, your financial advisor or employer will often provide you with a beneficiary form along with all other paperwork. If I started that job or applied for life insurance 20 years ago, those beneficiary designations could be 20 years old. Sometimes I can’t even remember what I had for dinner last night, let alone who made the decision.

Then, why are account names and beneficiary designations so important in wealth planning? Sometimes we ask for a beneficiary designation as to who should receive the account. “But you see, didn’t we make some fancy estate plan to get everything when I die?” asks her husband. A beneficiary designation supersedes what a will or trust may say. This is very important in estate planning as it may update the estate plan but never update the beneficiary designation. If you have an estate plan, you should ensure that your beneficiary designation is consistent with that plan. For example, if you want to put assets in trust for your child, listing the child as a beneficiary of her 401K means that the child acquires the assets outright without the trust.

There are always cases where there is no beneficiary designation or the old beneficiary designation is not updated. Former spouses, deceased and disabled beneficiaries are common mistakes. Most of these issues can be resolved by creating an estate plan, including listing trusts as beneficiaries. When you go to your first estate planning meeting with your attorney, be sure to discuss all assets and research beneficiary designations beforehand. A real estate planning attorney can teach you how to properly name your beneficiaries to meet your goals.

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