Here’s How Your $1 Million Life Insurance Could Go to The Wrong Person When You Die

A widow recently came to the office and told a sad story that everyone should hear.

Her husband “John” went to school, got married, built a successful company, had 3 kids, got a messy divorce, remarried and died. The problem is that his Transamerica life insurance policy and his Keogh retirement plan at Merrill Lynch listed his 1st wife as the primary beneficiary, not his kids or current wife.

Guess who got these assets upon his passing? You’re right the ex-wife.

John would be turning in his grave if he were aware that his oversight sent over $1 million to the wrong person.

Sheryl Garrett, the founder of Garrett Planning Network (the largest national organization of hourly financial planners) recently said “I encourage people to reconsider and recheck their current beneficiary designations whenever there is a change in their family or personal circumstances. These changes include marriage, divorce, the death of a beneficiary, a change in charitable desires, a new child or a child reaching  the age of maturity. To be sure recheck beneficiary designations every 5 years if they think nothing has changed.”

Regardless of the size of your estate, whether you have been married or not, have kids, and regardless if your life insurance policy is with Metropolitan Life, New York Life or some other or you have a retirement plan with Morgan Stanley, Charles Schwab or Fidelity, it is essential that you review the beneficiaries listed on every account.

Review all life insurance policies and retirement accounts. Contact every company and get a written statement as to who is currently listed as the primary beneficiary as well as the contingent beneficiaries (those who would receive payout should you outlive the primary beneficiary). Be sure it reflects your current wishes. If it is not correct ask for a change on beneficiary form and make your wishes known. Store this list of beneficiaries with your other estate planning documents.

The time you take could be the best investment to ensure your wishes are carried out and not disappoint your heirs.

About the author

Michael Chamberlain, CFP®

Hello. My name is Michael Chamberlain CFP®, the principal of Chamberlain Financial Planning and Wealth Management. Our firm is “fee-only” with offices in Sacramento, Campbell and Santa Cruz California. “Serving clients from the mountains to the sea.”

Our mission is to help clients realize their full potential today while planning for an abundant tomorrow through comprehensive financial planning and collaborative decision-making.

As an experienced investment and planning professional, I have had the privilege of being interviewed by and contributing to hundreds of articles in such publications as Money Magazine, Financial Planning Magazine, ABC.com, Forbes.com, Nerdwallet, NASDAQ.com, Yahoo Finance and more.

I hope that you spend some time at the FiGuide site and learn more about the financial matters important to you. To learn more about our firm, visit our website www.chamberlainfp.com or give us a call at 800-347-1340.

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Copyright 2014 FiGuide.com   About Us   Contact Us   Our Advisors       Login