The Powerful Benefits of a Beneficiary Review

Written by: Bob Vashko | Lincoln Financial

Helping your clients do more for their loved ones, while avoiding common beneficiary mistakes.

You’ve all heard the cautionary tales.

An ex-spouse collects a death benefit that was intended for the current spouse. Along the way, fights break out. Lawsuits happen. Family members stop talking.

And the biggest irony? The person who left behind the money, did so as an act of love. They never imagined that such chaos would ensue. Or maybe they mistakenly believed that their will would take care of who gets what in the end.

A short conversation. With a lasting impact.

It’s this simple. If you reach out to your clients annually to review their beneficiary designations, unnecessary hardship and misunderstanding can be avoided. After all, they may have many types of accounts that list beneficiaries, not just the ones that you oversee.

The holidays are a great time to discuss beneficiaries, because during this time of year loved ones are often top of mind. And a beneficiary review is a service that can go a long way in helping your clients ensure that the legacy they envision is in good order.

Top 5 reasons why clients should update beneficiaries:

  1. Their money might not go to whom they intended
  2. Their will doesn’t always control who gets the money
  3. They may have forgotten to add (or subtract) a beneficiary
  4. They may not realize which life changes necessitate a titling update
  5. Their beneficiaries may be hit with a larger tax bill than necessary

An introduction to the next generation

Research says 66% of children1 move on to a new financial professional once they inherit wealth. Well, a beneficiary review can be an opportunity to connect with the next generation. You can discuss with them if they’re better off with a lump-sum payment or extended payouts. Today’s conversation may pave the way for a future relationship.

1 Skinner, Liz. “Great Wealth Transfer is Coming, Putting Advisors at Risk,” Investmentnews, July 13, 2015.

Related: 9 Steps to Find Financial Wisdom In Adversity