Hi Reader,

It’s a time of year many of us will be getting together with loved ones we don’t see that often.

Which makes it a great time to consider whether your beneficiary designations are up-to-date!

What is a beneficiary designation? 🤔

A beneficiary designation designates who should get your account assets if you pass away. That person is the beneficiary of your account.

Usually you can just fill out a form online through your financial institution. By doing so, you are creating a contractual agreement between you and your financial institution regarding what to do with your account after you die.

The upside is that these designations are far and away the easiest estate planning mechanism to implement.

What types of accounts can have a beneficiary designation? 🏦

Most bank accounts, investment accounts and retirement accounts support beneficiary designations.

Checking accounts, savings accounts, money market accounts, brokerage accounts, IRAs and 401(k)s all likely will provide for beneficiaries. Sometimes they use similar provisions with different names, such as transfer on death (TOD) or payable upon death (POD).

And of course insurance policies – like life insurance – also have beneficiary designations.

Periodically review & keep your designations up to date!! 📆

Beneficiary designations are what’s known as a will substitute.

Being a will substitute has two implications. First, beneficiary-designation-based transfers avoid probate and the associated probate costs. That’s largely a good thing! But there is a potential downside…

That downside is found in the second implication of being a will substitute: beneficiary designations override the will.

No matter what your will, your trust – or any other estate planning document – states, your beneficiary designations will trump them.

If you’ve named your ex-husband as the beneficiary of your $1 million SEP-IRA, it doesn’t matter if your will or trust says your current spouses inherits everything. That’s what the legal profession refers to as a “too bad, so sad” situation.

If you don’t update your beneficiary designations, your ex or even people who have predeceased you can end up with your assets. And that can be a huge mess.

The ease with which you can put in place these designations belies how powerful and rigid they are once in place! So be cautious!

As always, if you have any questions about what I’ve covered today — or anything else happening in your financial life — HIT REPLY and ask away! I read and respond to every email.

Best,
Dave

PS: Don’t forget to register for Friday’s Webinar! You’ll get a recording if you can’t make it live! ✍️

Clinician Compensation Webinar Details 💻

WHAT: How to Crack the Clinician Compensation Code (a free webinar!) on Friday December 13th at 9am Pacific/12pm Eastern. (Yes, registrants will receive a link to the recording if you can’t make it live.)

WHO: The free webinar is for new or established group practice owners and is hosted by my friend, Julie, an accountant and the owner of GreenOak Accounting, a firm that specializes in working with therapists, psychologists, and counselors in private practice.

WHEN: Friday December 13th at 9am Pacific / 12pm Eastern* – don’t forget to mark your calendar as soon as you sign up!

WHY: If you’re looking to grow your team all while building a thriving practice, then you can’t afford to make expensive hiring mistakes!

👉 Sign up HERE, mark your calendar, and prepare to take your practice to the next level!​