One important part of financial planning is making sure you have a proper structure for you beneficiaries. What is a beneficiary you ask? Put simply, it's just someone who will receive your property from a will, a trust, etc. after your passing.
Why does this matter? People do not realize how critical it is to have a proper structure within your financial plan for your beneficiaries.
There was an article a while back in the Wall Street Journal about a young man that soon after he graduated high school he started working as a meter reader in New York City. He got married but by his forties, he was divorced. He eventually remarried and then retired with over a million in pension. In his divorce decree, it states that his pension will go to his second wife but unfortunately he never changed the beneficiary designation.
Why is it important that he changed his beneficiary document even though his divorce decree states where the money will go? Well, beneficiary documentation trumps a will, a trust, or anything else. Well how the story continues is that when he died, his million dollar pension didn't go to his second wife...it went to his first.
Life is constantly changing and you have to adjust your documents accordingly and that includes your beneficiary documents, too!