Are Your Beneficiary Designations Heir Tight?

Here are some of the more common beneficiary form mistakes and misconceptions:

  • Beneficiary-designation form is not signed and dated.
    • If there is a challenge to the designation or if there are multiple designations and it is impossible to determine which form is the most current.
  • Percentages do not add up.
    • Participant designates multiple primary beneficiaries and indicates a percentage allocation to each beneficiary but the total percentages do not equal 100%.
  • Participants believe that their wills override all beneficiary designations.
    • Beneficiary designations and the plan document determine who gets the money, not the will.
  • Participant does not update beneficiary designations to reflect life changes.
    • Life events such as birth, adoption, marriage, divorce, and death should trigger a review of beneficiary designations.
  • Participant changes the beneficiaries on life insurance, but not on the pension account (or vice versa.)
    • There are separate forms for each benefit.