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What you need to know about beneficiary designations in Virginia

On Behalf of | Nov 11, 2022 | Estate Planning

One of the most important aspects of estate planning is making sure your beneficiary designations are up-to-date. Too often, people forget to update their wills when they have a child, or they choose the wrong person as their beneficiary. This can lead to a lot of confusion and heartache for your loved ones after you die.

What are beneficiary designations?

These are the people or organizations that you designate to receive assets from your estate after you die. The most common beneficiary designations are for retirement accounts and life insurance policies, but you can also have them for other assets, such as bank accounts and brokerage accounts. Additionally, you can name more than one beneficiary for each asset.

Why are beneficiary designations important?

Beneficiary designations are critical because they supersede anything that is written in your will. So, if you have named someone as a beneficiary in your will, but then you change the beneficiary designation on your retirement account, the new beneficiary will receive the money from the retirement account, not the person you named in this estate planning document.

What happens if I don’t have any beneficiary designations?

If you don’t have any beneficiary designations, then your assets may get distributed according to your will. However, if you don’t have a will, then your assets may get distributed according to your state’s intestacy laws. These laws vary from state to state, but generally, your spouse and children will receive most of your estate. If you don’t have any spouse or children, then your estate may go to your parents or siblings.

What happens if my beneficiary dies before me?

If your beneficiary dies before you, then the assets will generally go to the contingent beneficiary that you have named. If you don’t have a contingent beneficiary, then the assets will generally be distributed according to your will or intestacy laws.

Ultimately, it’s up to you to decide who you want to receive your assets after you die. However, you should make sure that your beneficiary designations are up-to-date and accurate, and update them whenever there is a change in your family circumstances, such as getting married, having children or getting divorced.