• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
  • All Articles
  • Arts & Culture
  • Health
  • News
    • News
    • Announcements
    • Obituaries
    • The Official Dish
  • Opinions
  • Horoscopes
  • PODCAST
  • Subscribe

Ambush Magazine

The Official Gay Magazine of the Gulf South™

  • Read All Articles
  • Print Archive
  • Old Archived Site
  • Contact Us
  • Advertise

Five Mistakes to Avoid When Naming Beneficiaries

July 2, 2019 By Community Contributor

If you’ve ever spent time working through your estate plan with a professional, you know how important it is to select and update your beneficiaries. Failing to do so can result in costly mistakes – for you and your loved ones. Here are five common mistakes that can easily be avoided with a bit of proactive planning:

Mistake #1 – Not naming a beneficiary on all accounts. Ensure you have beneficiary designations on all of your retirement, investment and banking accounts, as well as your insurance policies. If you don’t name a beneficiary on one or more accounts, your estate becomes the beneficiary of that account and your loved ones will need to go through the probate process (a legal process most families want to avoid for financial and emotional reasons). If this happens, your relative can lose their ability to use “stretch” payouts based on their life expectancy because the tax-advantaged status for retirement assets is lost. 

Mistake #2 – Forgetting to name a contingent beneficiary on all accounts. Many people list the same loved one – usually a partner or parent – as the primary beneficiary on most or all accounts. If this is how you’ve handled your assets, it is important for you to also name a contingent beneficiary. This is because if your primary beneficiary passes away first and no contingent beneficiaries are listed, it’s comparable to having no beneficiary designation. If you both die at the same time, funds go into probate. 

Advertisement

Naming contingent beneficiaries also gives the primary beneficiary the option to execute a qualified disclaimer so some assets can pass to next-in-line loved ones. For example, a primary beneficiary may not wish to claim the assets because of tax implications or because they don’t need the assets and prefer instead to pass your gift onto another beneficiary.

Mistake #3 – Not using specific names. One mistake many people make is listing a generic term – such as children, parents or aunts – instead of specific names in their beneficiary selections. This can be problematic, especially if you are part of a blended family. Many states won’t include or recognize stepchildren when the word “children” is listed. Another risk of vagueness is that a family member you’ve lost contact with may enter the picture and try to claim a piece of your remaining assets. With this in mind, make sure you use full names of each person when naming beneficiaries.

Mistake #4 – Failing to review your beneficiary selections regularly.Beneficiary designations override your will, so it’s crucial to keep them up to date. You may need to update your choices every few years due to life changes, such as if beneficiaries have died or your relationship with them has changed. This is particularly applicable if you’ve gone through a divorce or remarried. If your ex-spouse inadvertently remains the designated beneficiary of an account, he or she may have the upper hand if the case winds up in court. 

Advertisement

Mistake #5 – Not communicating your preferences with your partner and family. Communicating your legacy wishes is an important step to helping your loved ones know what to expect upon your death. While it can be tough to initiate the conversation, doing so can help reassure loved ones that you have a plan. Keep in mind that you don’t need to share the exact amount of money you plan to pass down to respective family members, unless doing so is your preference. Instead, share high-level details that give your family insight into how you intend to share your hard-earned wealth. 

Estate planning isn’t the most enjoyable part of planning for your financial future, but it is crucial to helping ensure that your assets are handled the way you desire after you no longer have control. Beneficiary designations can be complex, and depending on your situation, it may be hard to decide who to list as the recipient of assets. If you want a second opinion or help assessing the implications of your options, consult an estate planner and financial advisor in your area.

Filed Under: Financial

Related Posts

Financial Dos and Don’ts If You Plan to Have Kids Later in Life
Five Simple Tips to Maintain Positive Cash Flow in Your New Business
The Current Economic Expansion is Now the Longest in U.S. History.

Primary Sidebar

Connect & Join the Conversation

  • Facebook
  • Twitter

Recent Print Editions

  • Volume 38 Issue 17
  • Volume 38 Issue 16
  • Volume 38 Issue 15
  • Volume 38 Issue 14
  • Volume 38 Issue 13
  • Volume 38 Issue 12
  • Volume 38 Issue 11
  • Volume 38 Issue 10
  • Volume 38 Issue 05
  • Volume 38 Issue 04

Recent Articles

  • Trodding the Boards May 16, 2025
  • The LGBTLOL Queer Comedy Fest Returns to New Orleans
  • The Rockford Files: Waiting for Life to Begin
  • Trodding the Boards May 9, 2025
  • Queer Arts as Resistance

Experience Gay New Orleans

  • Gay New Orleans
  • Gay Mardi Gras
  • Gay Easter Parade
  • New Orleans Pride
  • Gay Appreciation Awards
  • Southern Decadence
  • Gay Halloween

Categories

  • A Community within Communities
  • Announcements
  • Arts & Culture
  • Bartender of the Month
  • Book Review
  • Business
  • Chop Chop
  • Commentary
  • Drag Queen Profile
  • Featured
  • Film Review
  • Financial
  • Geo Doing Geo Things
  • Health
  • Horoscopes
  • Interviews
  • Interviews from Key West
  • Letter to the Editor
  • Moments in Queer New Orleans History
  • Museum Spotlights
  • Music
  • Musings by Catherine
  • New to New Orleans
  • News
  • Obituaries
  • Opinions
  • Pride Spotlight
  • Profiles & Spotlights
  • Sports
  • The Here and the Now
  • The Official Dish
  • The Real Cheese
  • The Rockford Files
  • Trodding the Boards
  • Uncategorized
  • Under The Gaydar

Footer

Ambush Magazine Logo

Ambush Magazine is New Orleans' and the Gulf Coast's Gay, Lesbian, Bisexual, Transgender, and Queer entertainment, news, and travel guide since 1982.

Publisher TJ Acosta
Editor-In-Chief Reed Wendorf
Founding Publisher/Editor Rip Naquin-Delain
Senior Editor Brian Sands
Distribution George Bevan Jr

Email info@ambushpublishing.com
Phone (504) 522-8049

Recent Posts

  • Trodding the Boards May 16, 2025
  • The LGBTLOL Queer Comedy Fest Returns to New Orleans
  • The Rockford Files: Waiting for Life to Begin
  • Trodding the Boards May 9, 2025
  • Queer Arts as Resistance

Proud Member

Gulf South LGBT Chamber Logo

Let’s Get Social

  • Facebook
  • Twitter

Copyright © 2025 · Ambush Publishing LLC All Rights Reserved · Website Built by Reed Wendorf · Log in