Download the Schwab app from iTunes®Get the AppClose

The Beauty of Beneficiary Designations

Are Your Beneficiaries Up to Date?

Designating beneficiaries on your investment accounts can easily slip to the bottom of your to-do list. But this task shouldn’t be forgotten. It can help protect a sizeable portion of your estate and ensure that your assets go to the right people once you pass away.

Here’s why beneficiary designations should play an essential role in your estate plan:

  • They’re powerful. You can specify who should inherit your retirement and life insurance assets without making adjustments to your will or trusts. In fact, these designations take precedence over wills and trusts in most cases.
  • They’re probate-proof. Because these designations supersede will and trust instructions, they circumvent the probate process and ensure that assets can be transferred to heirs without delay.
  • They’re simple. Many institutions offer the convenience of updating these beneficiary designations online.

    And here’s when you should consider making updates to your designations:

    • Family changes. Marriage, divorce, the birth of a child or grandchild, the loss of a spouse—all these events can prompt a change in beneficiary decisions. Keeping your beneficiaries up to date ensures that you don’t inadvertently leave money to the wrong people or leave a loved one out of your plan.
    • Money moves. If you recently rolled over a 401(k) from a former employer or transferred an existing IRA to a new financial firm, your beneficiary designations won’t transfer over with your assets. Make sure you take the time to specify them again.
      Should the Recent Past Inform Your Investing Decisions?
      Is Recency Bias Influencing Your Investing Decisions?
      Yield to What?
      Yield to What?

      Important disclosures:

      The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

      All expressions of opinion are subject to change without notice in reaction to shifting market conditions.

      ©2016 Charles Schwab & Co., Inc. All rights reserved. Member SIPC.


      Thumbs up / down votes are submitted voluntarily by readers and are not meant to suggest the future performance or suitability of any account type, product or service for any particular reader and may not be representative of the experience of other readers. When displayed, thumbs up / down vote counts represent whether people found the content helpful or not helpful and are not intended as a testimonial. Any written feedback or comments collected on this page will not be published. Charles Schwab & Co., Inc. may in its sole discretion re-set the vote count to zero, remove votes appearing to be generated by robots or scripts, or remove the modules used to collect feedback and votes.