2) Update your beneficiaries
It’s an easy but oft-forgotten step in financial life planning: updating your beneficiaries. Designating the appropriate beneficiaries is a critical step in estate planning, but many people set them once then forget them. Now is a good time to review these elections across retirement accounts, life insurance policies, and even certain bank or brokerage accounts.
It’s also important to review how beneficiaries are designated, not just who they are, as the way in which you designate beneficiaries can have important ramifications on your tax bill. For example, there are different tax implications for naming an individual or naming a trust.
From a tax perspective, beneficiary decisions can shape the method and speed of asset distribution and taxation. Take five minutes now to do a comprehensive audit and gain peace of mind for your heirs. If you need help making decisions, we’re happy to review your options with you.