Just as you should check all of your estate planning documents every few years—the same goes for beneficiary designations. When was the last time you reviewed your beneficiary designations on your life or annuity policies? Many people have beneficiary designations that are outdated due to major changes in their lives. Check your beneficiary designations from time to time to make sure they are what you intend them to be, especially after major life events.

Life changes such as marriage/divorce, addition of children/grandchildren, death of your named beneficiary, substantial changes in your estate value, other changes in family dynamics, as well as name/address changes for your loved ones. Take time now to review your beneficiaries.

You should select both primary and contingent beneficiaries. Contingent beneficiaries will inherit if the primary beneficiaries precede you in death. Keeping your beneficiary designations up-to-date is an effective estate planning tool to build and maintain wealth. Designating beneficiaries when you set up your account is the easy part. Remembering to keep the documentation updated is the important part.

Failing to update these designations may result in your assets being distributed to someone you didn’t intend. If you do not have any living beneficiaries when you pass, the proceeds are paid to your estate and may be impacted by probate laws in your state. Why does this matter? Because beneficiary designations supersede the terms of your will and avoid the probate process.