Every IRA or company retirement plan asks you to name a beneficiary. When you purchase a life insurance policy, you ll be required to name a beneficiary. Even when you receive life insurance as part of your company benefits plan, you ll be asked to name a beneficiary. Your first step is to make sure you ve actually named the right beneficiary. This small form might be easily overlooked, especially for IRAs established many years ago or for rollover accounts, Check with your employee benefits manager and IRA custodians, as well as life insurance companies, to make sure they actually have the signed forms.
Most people give the process of naming a beneficiary very little thought.
It s easy to write down your spouse s name. And it s easy to forget to change your beneficiary after a divorce. Or you might want the insurance proceeds to go toward your child s college education. So you simply fill in the child s name as beneficiary. Perhaps you re worried about taking care of elderly parents, so you name them as beneficiaries of an insurance policy or retirement plan.