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Always remember to identify beneficiaries on your 401(k)

No matter how well designed your will happens to be, it probably does not cover the disposition of your 401(k) and Individual Retirement Accounts. These accounts have a special form to designate beneficiaries of the funds. Unless Texas residents correctly specify who is to receive the contents of their 401(k) account on their 401(k) beneficiary form, those assets might end up being distributed in a way that you did not originally intend. For this reason, it is important to make sure that you have completed any beneficiary forms on your financial accounts and that you have filled them out appropriately. 

At the Law Office of Sharon C. Stodghill, we have seen the heirs of an estate being denied an inheritance that the original estate owner intended them to have. This can happen in a lot of different ways, but one common one is because of an error on a 401(k) or IRA beneficiary form. If the beneficiary of your IRA or 401(k) suddenly dies before you do, for example, you might need to take that person's name off the document and replace it with a new beneficiary. 

A mistake on a beneficiary form could be devastating for heirs, particularly if the 401(k) represented a substantial part of the decedent's assets and it is not distributed according to the decedent's true wishes. This is why it is essential to review all beneficiary designations on various accounts. Checking in with them once per year -- as well as reviewing your will -- is the best way to ensure that everything is up to date.

One of the benefits of getting professional assistance with your Texas estate planning is that an estate planning professional will not overlook minor details that could ruin your entire estate plan. Indeed, an estate planning professional knows exactly what questions to ask to ensure that no mistakes were overlooked. In this regard, the comparatively small price paid for such services is well worth the piece of mind of knowing that your estate will be dispensed to beneficiaries in the manner you have planned after you are gone. 

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