Why Beneficiary Designations Matter More Than You Think

Estate planning is an ongoing process. Creating and signing your estate planning documents is only the beginning; ensuring those documents work as intended requires continued attention. One of the most important steps in estate planning is funding your trust. This involves retitling assets into the name of the trust or setting up beneficiary designations to determine how your assets should be transferred upon your death. However, you should know that not all assets follow the same rules. Unlike bank accounts, investment accounts, or real estate, retirement accounts are generally not retitled into the name of a trust, as doing so can trigger significant penalties and tax issues. Instead of retitling, people may choose to add beneficiary designations to control how these assets transfer at their death. Doing this can be a practical choice, but it is important to ensure that the beneficiary designations you choose are valid, or else your...