IMPORTANT DISCLOSURE INFORMATION
The following presentation by New England Capital Financial Advisors, LLC (“NECFA”) is intended for general information purposes only. No portion of the presentation serves as the receipt of, or as a substitute for, personalized investment advice from NECFA or any other investment professional of your choosing. Please see additional important disclosure at the end of this penetration. A copy of NECFA’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at www.newenglandcapital.com.
Why Beneficiaries Matter
Hi…Matt Carreras here at New England Capital. Today we’re going to talk about something that’s easy to forget, but an important part of owning financial assets – it’s your designated beneficiaries.
Like many people, you may think about naming beneficiaries on an account when you fill out an application form, for an IRA or your 401k at work for example, and then put it out of your mind for a long time.
Let’s start by reminding you why it’s important to have named beneficiaries on your accounts.
When you pass away, your assets will go through the state court process that you’ve probably heard of, called probate, and it usually takes months and sometimes even years. In probate, all your assets are collected and then divided out per your will or, if you don’t have a will, by the court following state rules. Your named beneficiaries, on the other hand, can take ownership of those accounts right away and avoid the time and expense of probate.
You’re going to want to review them from time to time to make sure they still reflect your wishes. This is especially important after big changes in your life – like getting married or divorced, having a close relative pass away, or having kids. Marriage and divorce are especially important because whether your beneficiary is designated as a spouse or not can effect their choices if you pass away before them.
Another important thing to keep in mind is that your named beneficiaries on accounts will override what you have in your will. For example, let’s say you want your IRA to go to your child… and you spelled that out in the will you created after the child was born… But your sister is the beneficiary on that IRA from when you opened it years earlier.. there’s a mismatch… and in this case, your sister can claim ownership of that IRA since the named beneficiary takes precedence over what you have in the will.
One last thing, it’s important to have a back-up choice – and that’s what a contingent beneficiary is. If your primary beneficiary is either unable or unwilling to claim the account when you pass away, then it would go to the contingent beneficiary automatically. If there is no contingent, the account would then go through the probate process.
Needless to say, these are important details to get right and there are other nuances that we’re not even touching on here… such as special rules around 401k’s and trusts. As always, if you have any questions… please contact us anytime… and have a great day.
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by New England Capital Financial Advisors, LLC [“NECFA”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from NECFA. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. NECFA is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the NECFA’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.newenglandcapital.com. Please Note: NECFA does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to NECFA’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Remember: If you are a NECFA client, please contact NECFA, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.