A recent Supreme Court Decision, available here underscores why everyone should double-check who their beneficiaries are.
In Hillman v. Maretta, a remarried man failed to change the beneficiaries on a Life Insurance policy, which still named his former spouse as the beneficiary. Although there was a state law, which prevented divorced spouses from being designated beneficiaries, it conflicted with Federal requirements and thus the divorced spouse was allowed to collect her ex-husband's life insurance, instead of his current wife.
What Hillman vs. Maretta demonstrates is the absolute importance of reviewing the beneficiaries to your financial accounts. It is important to update wills and life insurance policies regularly to make sure the proper family members receive the assets you desire they have. It is especially important to update information after major life changes, like a divorce, to ensure your planning documents remain current. Do not assume that the correct individuals will inherit your assets because if you do not create a proper plan the court will make powerful decisions for you that you may not agree with.
Earlier this month we posted a blog about life insurance beneficiaries, 10 Life Insurance Beneficiary Mistakes to Avoid. Review this list and take this court case as an example of an avoidable mistake resulting from poor planning.
At Estrada-Legal, we focus on planning for you, your family, and creating your lasting legacy. Contact us today to schedule a review of your current plans and policies.