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Posted by: Charles P Myrick CPA Posted on: Dec 02 2014 Posted in: tax planning and preparation

3 Easy Steps to Update Your Beneficiary Designations

Do you know who you have designated as beneficiaries on your insurance policies and retirement accounts? It’s not uncommon to forget, especially when the decisions were made years ago. It’s proably time to review and, if necessary, update those designations.


What should I know about beneficiary designations?

A. The person you designate as beneficiary for an account will inherit the assets in that account, regardless of the terms of your will.

B. Beneficiary designations will not be affected by changes in your will. Your designation determines who will inherit the assets in the account, regardless of what your will might say. Those assets will bypass probate and go straight to the person or institution you named.

C. You can designate a person or group of persons, a charity, a trust, or your estate. You may also want to designate a secondary or backup beneficiary in case the primary is no longer living.

D. In certain cases, there are tax implications to your choice of beneficiary. For example,   your choice of beneficiary for a traditional IRA can affect how quickly withdrawals must be made, and taxes paid. Such circumstances might change the value of the IRA to your beneficiary.

How do I update my beneficiaries?

It's easy with these three steps:

1. Start by making sure that you have copies of all your current designations. If you cannot locate the documents, contact your insurance company or account trustees.
2. Evaluate them and decide what changes you will make. In most situations, you should designate a secondary or backup beneficiary. Consult with your tax or estate planning advisor to review the changes. It's always wise to ask for expert advice.

3. Send your updated designations to the account trustees. Make sure you receive confirmations and keep copies for your records.


Effective estate and trust planning can ensure financial security for loved ones. For businesses, it can maintain a smooth succession of ownership. Contact Charles P Myrick CPA, Washington DC tax preparation firm,to help you navigate the complex and shifting tax laws to facilitate the transfer of assets and minimize the tax liability of your beneficiaries. Having your taxes and estate thoroughly and carefully planned will ensure that your loved ones don't have any complications to deal with during a time of loss.


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