Most people assume their investment accounts will pass directly to loved ones when they’re gone, but that doesn’t always happen. It only takes one mistake, and your IRA could end up in probate. Missing, outdated, and poorly planned beneficiary designations can easily cause your account to default to the estate and enter the probate process. Probate is stressful, time-consuming, and costly, and something you should take steps to help your loved ones avoid.

First, after setting up an investment account and funding it, pay close attention to the beneficiary designation form. Name multiple primary beneficiaries and contingent beneficiaries. Then choose the percentage splits for each. Some people make the mistake of leaving the beneficiary designation blank or write “my estate” or “my kids” on the form. Being related to someone doesn’t mean you will automatically inherit their assets when they die – even if you name them in your Will. Beneficiary documents must be specific and current to be effective. 

Next, put a date on your calendar to touch base with your account advisor to ensure your designations remain accurate. A divorce or death are reasons for a revision. If a loved one has become ill and can no longer work, you may choose to rethink the percentage split. Another great reason to touch base with your advisor, it gives you a chance to discuss their fees and asset allocation. 

Alloy Wealth offers estate planning services and can work with you to create a legacy plan that will enable you to manage your affairs during your lifetime and express your wishes when you are not able. With the right plan, you can ensure your assets are efficiently passed to your loved ones and protect them from the probate process when you’re gone. Contact us at 800-689-3935 to schedule an appointment.