Most of our Idaho clients hire us to draft three basic estate planning documents: (1) a will or trust; (2) a power of attorney for health care; and (3) a power of attorney for financial affairs. Walking out of our office with those three documents does not necessarily mean your estate plan is complete. There are several additional tasks our clients likely need to perform after they leave our office. The two most common tasks include updating beneficiary designations on retirement accounts and life insurance contracts.
As a general rule, individuals with retirement accounts (whether employer sponsored or not) must list beneficiaries to their accounts. Most individuals list their spouses as the primary beneficiary of their accounts and, if available as an option, list their children as contingent beneficiaries in equal shares. Most of our clients have not reviewed their beneficiary designations for several years – or even decades – and rarely think of doing the same. Unfortunately we see cases in which clients forget to update their beneficiary designations so their retirement accounts end up being distributed contrary to our clients’ intentions. It is important to understand who you have designated as beneficiaries of your respective retirement accounts.