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Tell Your Beneficiaries about
Your Accounts and Policies

Let them know how they will
receive retirement assets and insurance benefits.
A message from Belco Retirement & Investment Services

Will your heirs receive a fair share of your wealth? Will your invested assets go
where you want them to when you die?
If you have a proper will or estate plan in place, you will likely answer “yes” to both
of those questions. e beneciary forms you lled out years ago for your IRA, your
workplace retirement plan, and your life insurance policy may give you even more
condence about the eventual transfer of your wealth.
One concern still remains, though. You have to tell your heirs that these documents
exist.
at does not mean sharing all the details. If you have decided that some of your
heirs will one day get more of your wealth than others, you can keep quiet about that
decision as long as you live. You do want to tell your heirs the essential details; they
should know that you have a will and/or an estate plan, and they should understand
that you have named beneciaries for your retirement accounts, your investment
accounts, and your insurance policies.
Over time, you must review your beneciary decisions. In fact, you may want to
revisit them. As an example, say you opened an IRA in 1997. Your life has probably
changed quite a bit since 1997. Were you single then, and are you married now? Were
you married then, and are you single now? Have you become a parent since then? If
you can answer “yes” to any of those three questions, then you need to look at that
IRA beneciary form now. Your choices may need to change.
Here is a quick look at how beneciary decisions play out for a few of the most
popular retirement accounts:
Employer-sponsored retirement plans. ese are governed by the Employee
Retirement Income Security Act (ERISA), which rules that if the late accountholder
was married, the surviving spouse is entitled to at least 50% of the account assets. That
applies even if another person has been designated as the primary beneciary. In such
a case, the spouse and the primary beneciary may split the assets 50/50. (e spouse
can actually waive his or her right to that 50% of the invested assets through a Spousal
Waiver form. A spouse usually has to be older than 35 for this to be allowed.) ese
rules also apply for other types of ERISA-governed retirement assets, such as pension
plan accounts and corporate-owned life insurance. 1,2
e Supreme Court has decided that these rules take priority over state laws (Egelho
v. Egelho, 2001; Hillman v. Maretta, 2013) and divorce agreements (Kennedy Estate v.
Plan Administrator for the DuPont Saving and Investment Plan, 2008). 3,4
If a participant in one of these retirement accounts remarries, the new husband or
wife is entitled to 50% of those assets at death. While a plan participant may name a
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