Electing beneficiaries allows you to make sure your assets get distributed to your loved ones in a way you desire.

If there is not a living beneficiary named at the time of your death for any of the contracts requiring a beneficiary designation, the fund proceeds will go to your estate. The state will choose your beneficiaries based on the intestate succession laws for the state in which you reside.

Beneficiary forms need to be completed and continually kept updated. You cannot designate a beneficiary through a will. Instead, forms need to be completed and updated through the company where the account is maintained. Copies of beneficiary designation forms should be kept in a safe place at home and also with your attorney and tax professional.

How Many Beneficiaries Should Be Named?

Name at least one primary and at least one contingent beneficiary. Contingent beneficiaries are necessary so that if a primary beneficiary dies or disclaims the asset, property will pass to the second choice.

In some instances, it is not possible for the owner to choose just any beneficiary; spouses must be designated if the owner is married. In order to make more informed beneficiary choices, understand the needs of your beneficiaries and their ability to handle financial matters. Know each beneficiary's age, health condition, and financial situation. Review the current market value of each bequest to make sure it is what is desired.