Why You Should Review Your Beneficiary Designations

by Mitchell J. Smilowitz, CPA

Making contributions to the JRB means that you are taking important steps to lower your taxes and accumulate savings for a comfortable retirement. But, God-forbid you pass away, the beneficiary information on file determines who inherits the money in your JRB account. That’s why it’s important to keep your beneficiary designations up-to-date. 

Events that should trigger a beneficiary review include the birth of a child, death of a family member, marriage, divorce or other change in your personal situation.

The beneficiary named in your JRB retirement account inherits these assets regardless of who is named in your will, a trust or other estate planning documents.  This also is the case for any life insurance policies you hold. 

The JRB requires you to designate a Primary Beneficiary, the person, or individuals, who will inherit your account upon your death. We also encourage you to designate a Contingent Beneficiary, the person, or individuals, who will inherit your account in the event your Primary Beneficiary predeceases you. For example, many participants name their spouse as their Primary Beneficiary and their children as Contingent Beneficiaries. 

Another planning tool to consider: adding a per stirpes designation for your beneficiaries. A per stirpes designation allows for a deceased beneficiary to pass their inheritance to their heirs.  Without the designation, this portion would be divided among the surviving beneficiaries. For example, assume you named your spouse as the Primary Beneficiary and your two children as Contingent Beneficiaries. If your spouse and one of your children predecease you, at your death the half that would have been inherited by the deceased child would go to your grandchildren from that child; your other child would continue to receive 1/2 of the assets in your retirement account.  Without a per stirpes designation, all of the assets would be inherited by the surviving child. 

Please contact the JRB office to review your beneficiary designations at 888-JRB-FREE (572-3733) or send us an email.  You can update the beneficiaries on your JRB retirement account by sending us a signed Beneficiary Change Form. Of course, you also should review and update your beneficiary designations on any other retirement assets and life insurance policies.

While these are difficult situations to consider, it is better to protect yourself and your beneficiaries in case of an unfortunate event.

July 2018