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Who Is Your Beneficiary?

July 26, 2012

The key here is simple: name a beneficiary(ies) and keep it updated

Good planning takes into account both the expected and the unexpected. By naming a beneficiary, you’re ensuring that your money goes where you want it to go when you pass. While it may seem easy to overlook now, the effort may be greatly appreciated by your heirs.

Employer-sponsored plans are unique in that they generally require that a spouse is the primary beneficiary, unless you elect otherwise and your spouse consents in writing. But other investments, such as individual retirement accounts (IRAs), may not provide this automatic feature.

You may choose to name more than one beneficiary for a particular account. However, you will need to specify the percentage each beneficiary is to receive. If you don’t, your assets will be divided equally among your designees.

Keep in mind, your gift may come at a price. Those who inherit your account will be assessed income tax on the amount you leave them. Of course, Uncle Sam would not hit a beneficiary in a lower federal income tax bracket as hard.

Once you name a beneficiary, you may want to review your selection from time to time, perhaps at major life changes like marriage, divorce, or the birth of a child. As your situation changes, you may find that a new beneficiary is appropriate.

Common Sense Investing for the Long-Term

Sweeten Wealth Management

Alan J. Sweeten, CFP ®


Phone (800) 841-2796 / Cell (760) 460-6509 /

© 2010 Standard & Poor’s Financial Communications. All rights reserved.

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