Are your beneficiaries up-to-date?

How long ago did you fill out forms that required a beneficiary? Was it six years ago when you were sitting in the HR department at your job. Or, 2 weeks ago when you signed up for the 401(k). Or, whenever you opened an IRA. Or, after Michael Jackson died and you put together a will? Whatever, I’m not really expecting an answer of a date and these scenarios might not be relevant to you, but at one time we all have to fill out something that says who will receive benefits in case we aren’t around.

Usually once you fill out the forms you set them out of your mind. But you can’t just let these things lie. Relationships change and people come and go. If you’re favored son has become your despised nemesis do you want his name to remain on your list of beneficiaries? And when you make up, do you want him to still be cutoff?

So, you know where I’m going with this don’t you? Yep, it’s another thing to add to your to do list. Periodically you need to have a looksee at who’s who on your important documents, especially after life changing events. If you don’t, well somebody will suffer the consequences.

Accounts with beneficiary designations - such as IRAs, 401(k)s, insurance policies and annuities - aren't governed by your will. They will separately list beneficiaries and you don’t have to put the same people on each. However, there are advantages to naming a spouse over a child on IRAs and 401(k)s. Your partner can roll over such accounts into his or her name, thus postponing distributions and taxes until age 70½. If you name your child, they must start taking distributions - and paying tax on them - the year after your death.

Don’t leave beneficiary lines blank. This will cause your assets to go to probate. Also, avoid listing your estate as beneficiary. By law, heirs then must empty the account within five years, which could cost them investment gains and bump them to a higher tax bracket.

Do name a second beneficiary. Otherwise, if your primary beneficiary dies before you, the account goes to probate.

Don’t name children under 18 as primary beneficiaries. This, too, can lead to probate. You can avoid probate by setting up a trust in the child's name.

It’s really no big deal to change beneficiaries at any time. To name a new beneficiary, all you'll need is the person's birth date and, sometimes, Social Security number.