Many of our clients have been clients for many years, and during that time, we have seen many changes in their lives. Some of the changes are joyful –clients marry; children and grandchildren – even great-grandchildren – are born; loved ones marry. But some of the changes are more difficult – a beloved spouse/child/parent dies or a marriage ends in divorce. These events can be much more traumatic, and often, people are in a hurry to move forward and get on with their lives, putting the hardship behind them. Before doing so, we urge our clients to take a look at their assets, and make sure that they are still being left to those to whom they wish to leave them.
By way of example, assume John and Mary were married 30 years ago, and Mary instantly obtained a $3,000,000 life insurance policy, listing John as beneficiary. Three years later, they divorced, and Mary remarried, and had three children with her new husband, Dave, with whom she lived happily for the next 15 years, before her untimely death. Luckily, when Mary died, she had a $3,000,000 life insurance policy on her life, which Dave desperately needed, as he had spent the last 15 years as a stay-at-home father raising his and Mary’s three young children. Unluckily, the beneficiary of the life insurance policy was not Dave, or his and Mary’s children; rather, the beneficiary of the life insurance policy was John, Mary’s first husband. Although Mary had always intended to change the beneficiary of her life insurance policy, she had never gotten around to doing so. As a result, upon Mary’s death, she left her cheating ex-husband with a sudden windfall, and her adored and beloved second husband, and the father of her minor children, with nothing but a mortgage on their home. This is certainly not what Mary intended, and this could have been avoided had Mary simply executed a simple half-page beneficiary designation form which her life insurance company had sent to her.
Don’t let what happened to Mary happen to you. If you are contemplating, or have experienced, a major change in your life in recent times, take a minute to review the beneficiary designations on your various assets – POD accounts; retirement accounts; life insurance policies – and ensure that they reflect your desires. In some cases, changing the designations may require court approval and/or spousal waivers, and, in certain circumstances, these issues must be addressed. In any event, we are happy to discuss these issues with you at your next Multi-Year Review, or sooner if the need arises.