Senior couple reviewing financial documents with laptop
Senior couple reviewing financial documents with laptop

Your life changed. Did your beneficiaries change too?

Sixty four percent of Americans think that having a will is important. However, only 34% of people have an estate plan in place. If you’re among the 64%, congratulations. But you’re not done yet. It’s important to periodically review your will or trust with a financial advisor and make sure it’s up to date. Life brings change. Your will and trust ought to keep pace. That’s especially important if your marital status changed or you have had children since your will was created. By partnering with a financial planner, you can be sure your beneficiaries are current and the money you pass down is going to the people you choose.

When to review your beneficiaries

At a minimum, you should review the beneficiaries in your will or trust every five years. However, certain milestones in life might prompt you to think about and update these documents even sooner. Some of these events include:

  • Marriage
  • Birth or adoption
  • New job
  • Divorce
  • Guardianship
  • Remarriage
  • Death in the family

The good news is that changing beneficiaries is pretty simple. You can designate someone as a beneficiary or remove a beneficiary and designate someone else with a simple change-of-beneficiary form. This is especially important if a named beneficiary – such as a spouse – has passed away or you’re now divorced. If you listed a charity as a beneficiary when you created the document years ago, make sure it still exists. Charities come and go. You want to know the one you’re giving to is still doing the work you support.

Tax time, when people are focused on finances and long-term financial planning, is a good time to think about your will or trust, and who the beneficiaries are. When’s the last time you reviewed it? Have your circumstances changed? If you’re confident it is still a good fit, check in again next year. If it has been a while since you reviewed your documents, now’s a good time to set up a meeting with your financial advisor, and address any changes. Then you can get on with your day-to-day activities and have the peace of mind that comes from knowing your legacy is going to be handled the way you want.

Will or trust. Which is right for you?

For most people, a will is the best option. It’s binding, relatively simple to put in place and can be easily updated as needed. For high-net-worth individuals or people with complicated financial situations, a trust may be the better route. A trust is much more detailed and includes very specific instructions. What’s the difference? It’s sort of like hiring a babysitter for the night. When you tell the babysitter you’re going to the movie and will be back in a couple of hours, that’s a will. If you tell the sitter you’re going out to dinner and a movie, you’ll leave shortly after the movie ends, stop by a coffee shop on the way home, arrive home at 9 pm and the kids should be in bed by 8:30, that’s a trust. Either option can be sufficient. In fact, your advisor may recommend a combination of the two.

What should be covered?

A will or trust should adequately cover all of your assets. That includes life insurance, bank accounts, qualified and non-qualified investment accounts, 401ks, IRAs, and joint accounts. Talk to your banker or financial advisor for guidance. Some banks may charge a fee (First Financial Bank doesn’t charge a fee) so be sure to ask your bank. And once your documents are complete, store them someplace safe like a fireproof box or safe, or a safety deposit box at the bank. Also, make sure your family or executor knows where the materials are stored, as well as any websites or passwords they’ll need to access.

41% of people said they’d wait until a medical diagnosis or health concern arises before creating an estate plan. But that may be too late. If you haven’t already, work with your financial planner now to put a will or trust in place. Then be sure to check in periodically and make sure your beneficiaries are up to date. That way, you can rest easy knowing the assets you leave behind are going into the right hands.

Stop by your local financial center for a complimentary beneficiary review today.

The information on this page is accurate as of February 2024 and is subject to change. First Financial Bank and Yellow Cardinal Advisory Group are not affiliated with any third-parties or third-party websites mentioned above. Any reference to any person, organization, activity, product, and/or service does not constitute or imply an endorsement. By clicking on a third-party link, you acknowledge you are leaving First Financial Bank and Yellow Cardinal Advisory Group are not responsible for the content or security of any linked web page. Member FDIC / Equal Housing Lender


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