Name that Beneficiary!

Prevent potential headaches to your heirs. Make sure they are listed as intended beneficiaries on all of your financial accounts which make up your estate plan.

We'll keep it simple with the basics:

• Your will does not always hold water. If you have out-of-date beneficiaries on your financial accounts, such as IRAs, 401Ks and insurance policies, you may have a major problem. Your will does not control these assets, even if you wrote the particular beneficiary out. Bottom line: review your beneficiaries periodically, particularly after a major life event (most commonly death or divorce).
• Name a Runner-Up. In most documents, you may name two beneficiaries, so be sure to fill in the second space. If the first beneficiary should die before you, the asset will go through probate, which is expensive and time-consuming.
• Retirement Plans are Tricky. Enough said. Make sure your estate planning attorney helps you with this one.
  
• Do not Name a Minor as Beneficiary. Should you die before the minor reaches adulthood, the property will likely be probated. Courts have strict rules about how benefits are distributed to minors and will supervise--which means it is costly. A trust may be a better option.
  
• Feel Free to Change Beneficiaries. A simple form is typically all that is required.

Adapted from "Five Things to Know About Naming Beneficiaries" by Ismat Mangla of Money Magazine.