• Best Practices New Normal
  • Digital Dentistry
  • Data Security
  • Implants
  • Catapult Education
  • COVID-19
  • Digital Imaging
  • Laser Dentistry
  • Restorative Dentistry
  • Cosmetic Dentistry
  • Periodontics
  • Oral Care
  • Evaluating Dental Materials
  • Cement and Adhesives
  • Equipment & Supplies
  • Ergonomics
  • Products
  • Dentures
  • Infection Control
  • Orthodontics
  • Technology
  • Techniques
  • Materials
  • Emerging Research
  • Pediatric Dentistry
  • Endodontics
  • Oral-Systemic Health

It's Crucial to Update Beneficiaries When Life Changes

Feature
Article

Ensure fairness across generations by choosing the right annuity or life insurance distribution method.

annuity,beneficiaries,insurance,payment

Because annuities, life insurance policies and retirement plans list beneficiaries, they all bypass probate court, meaning that the will won’t determine who gets the proceeds.

Once you’ve bought an annuity or a life insurance policy and named your beneficiaries, you may never think about your beneficiaries again — but that could be a big mistake.

If you get divorced and remarry, but fail to change your beneficiary from your ex-spouse to your current spouse, your ex will receive the proceeds. Besides divorce, other life changes such as marriage or death of a loved one are occasions to review beneficiaries.

Additionally, there may be new people in your life that you want to include, like grandchildren or perhaps there’s a charitable organization you wish to support.

Before making any changes, it’s important to understand how primary and contingent beneficiaries work.

If you’re married, your spouse is usually your primary beneficiary and your child or children are contingent. Contingent beneficiaries will receive the proceeds on your death if your primary beneficiary passes before you do or at the same time as you.

While you should notify the insurer about the death of a primary beneficiary, even if you don’t, the proceeds will automatically go to contingent beneficiaries.

Fairness Across Generations

If you have a number of grandchildren, the issue becomes more complex.

The default is to name your spouse your primary beneficiary and name your children contingent beneficiaries, who’ll all share equally in the proceeds, but suppose you’re married and have 3 adult children.

Here’s where it gets complicated. Suppose child A has 3 children, child B has none and child C has 2, for a total of 5 grandchildren.

What would happen if both your spouse and child C predecease you? In that case, unless you’ve set up your beneficiaries correctly, all the proceeds would go to your 2 surviving children. Child C’s two children would be disinherited.

That’s not what most people want.

Instead, you can specify that if 1 of your children is deceased that their share will go to his or her children. This is called a per stirpes distribution.

That means that each branch of the family will receive an equal share. If that’s what you want to do, you must request per stripes because equal distribution (per capita) is the default.

Per stirpes designations are available from most but not all insurance companies.

Because annuities, life insurance policies and retirement plans list beneficiaries, they all bypass probate court. This means that the will won’t determine who gets the proceeds — which is why having the right beneficiaries is so crucial.

My brief video about using per stirpes can be viewed online at https://www.youtube.com/watch?v=rOBK-nVYxgA.

Annuity expert Ken Nuss is the founder and CEO of AnnuityAdvantage, a leading online provider of fixed-rate, fixed-indexed and immediate-income annuities. He launched the AnnuityAdvantage website in 1999 to help people looking for their best options in principal-protected annuities. More information is available from the Medford, Oregon, based company at https://www.annuityadvantage.com.

Contact: Henry Stimpson, Stimpson Communications, 508-647-0705, Henry@StimpsonCommunications.com

Related Videos
2024 Dental Products Report Spring Selection Bracket Reveal Video
Process of Care Workflow and Repairing Early Caries with Guided Enamel Remineralization
Addressing Unmet Needs in Early Childhood Oral Care - an interview with Ashlet Lerman, DDS
Mastermind Episode 33 – Charting the Course for the Future of Dentistry
CDS 2024 Midwinter Meeting – Interview with Debbie Zafiropoulos, who discusses a trio of new infection control products from Armis Biopharma.
2024 Chicago Dental Society Midwinter Meeting – Interview with Peter Maroon, business development and sales lead at Spectrum Solutions® on the new salivary diagnostic test, SimplyPERIO.
CDS 2024: Ivoclar's e.max ZirCAD Prime Blocks with Shashi Singhal, BDS, MS
CDS 2024: Diving Deep on J. Morita's New Root ZX3 & HF Module
CDS 2024: What's New at TAG University? with Andrew De la Rosa, DMD
Related Content
© 2024 MJH Life Sciences

All rights reserved.