1. Did you know that if you do not name a beneficiary of a life insurance policy, annuity, qualified plan, or IRA generally the default beneficiary is your estate? This could get complicated and become costly.
2. Minors cannot own property in the United States. If you name a minor child as the beneficiary, an individual may have to petition and be appointed by the court to act as a conservator of this assets for the child.
3. Outdated beneficiary choices could result in unintended heirs and/or adverse tax consequences. Anytime you experience a life event, such as marriage, death, divorce, birth or adoption, you should review both the primary and contingent beneficiaries.
4. If you and your primary beneficiary were to die simultaneously, the Uniform Death Act provides that the beneficiary will be presumed to have died first. By naming a contingent beneficiary, you avoid having the proceeds pass to your estate.