This guide is for Texas law. It might or might not be applicable in your jurisdiction as well. And you should always consult with an estate planning attorney or other competent advisor before attempting to alter these designations. Beneficiary designations typically are most important on what I like to call 'The Three Stooges'...that is, annuities, life insurance policies, and retirement accounts. They are wacky like the 'The Three Stooges' and are prone to slap someone around if not handled carefully. However, beneficiary designations can also be placed on most bank account, some brokerage accounts, etc.
If you are married, as a general rule the primary beneficiary should always be your spouse. With that said, this general rule can vary based on the asset type, estate plan, or other factors. Please note that your spouse must consent in writing to any other primary beneficiaries you designate.
No Will or Estate Plan
If you have no estate plan your beneficiary designations are the only mechanism saving you from the Texas Will our government has written for you (whether you like it or not). It is vitally important in this case that you upgrade your estate plan to a Will so you can at least have some sense of protection for non beneficiary assets at death. Otherwise you should order your beneficiaries in this order: Spouse, Children, Other Relatives, Charities.
Last Will and Testament
If you have a Will in Texas, I would strongly urge you not to put the 'Estate' as a beneficiary. This would cause non-probate assets to enter probate (and thus become directly subject to your creditors, Will provisions, fees and costs, etc.). Otherwise you should order your beneficiaries in this order: Spouse, Children, Other Relatives, Charities.
If you have set up a revocable trust, and all your assets are properly funded into the trust, then you should order your beneficiaries in this order: Spouse, Trust, Children for non-retirement accounts; and Spouse, Children, Trust for retirement accounts (to preserve the Stretch option).
Most companies now put their 'change of beneficiary forms' on their website. Or you can call and request one. Make sure you keep a copy of any submitted form. If you do not receive a confirmation of the change (and what that change was) back from the company...ask for one; and keep on them until they send it to you! Be sure to review your designations with your attorney or advisor every year.
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