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Beneficiaries - Leaving a Legacy

March 21, 2023

Quick question for you – do you know how your assets and accounts will be distributed at your death?  OK, that’s heavy – I know.  But we know that for many, the legacy you leave behind for your heirs is critically important!  That’s why I wanted to take a couple of minutes to talk about your beneficiaries and how you can be confident that everything is set according to your wishes.

First, keep in mind that account-level beneficiary designations take precedence over your will.  For example, if your will stipulates that you plan to leave your IRA to your spouse, but on the IRA beneficiary designation it’s left to a charity, then the charity will receive the assets!  It’s a good idea to periodically make sure that the beneficiary designations on each of your accounts matches your wishes in your will.

It’s also important to make sure your will is complete and up-to-date.  Many times, wills are updated when life events occur, like the birth of children or grandchildren, or the passing of a family member.  When you complete or update your will, make sure to check on specific account-level beneficiaries too. It often comes as a surprise to hear that those beneficiary designations will “override” whatever is spelled out inside of a will.

Lastly, if your employer moves to a different 401(k) provider, make sure to check that your beneficiaries are up-to-date on any employer plan accounts. We’ve seen instances where beneficiary designations were not properly transitioned, and this could cause major headaches down the road!  Make sure you check the beneficiaries on these accounts periodically regardless of any 401(k) company changes.

The beauty of naming beneficiaries is that you can name whoever you’d like - family, friends, and even charities.  We encourage you to ensure your beneficiaries are aligned with your wishes.  We are also here to help with any questions you might have about the legacy and tax implications of leaving certain types of assets to your heirs.

If you have questions about how your beneficiaries are currently set, please reach out to us.  At Stonegate, we understand the gravity of your beneficiary decisions, and we’re here to help guide you through them as part of your overall financial plan.

Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.