OE Ends! Recap time. :-)

Hi Everyone,

Happy early 4th of July!? We’ve come to the end of a series about open enrollment, decision making and the importance of products that offer financial security.

I want to highlight something I’ve said no less than 3 times this month alone.?

Check and update your beneficiaries.

I can’t stress how important this is to you, your heirs, and your estate.? And guess what, I’m not going to.? Probate litigator and managing partner of RMO, LLP, Scott Rahn was kind enough to contribute to this week’s article and shed some light on why beneficiary designation is so extremely important.? (On a side note, it is so cool to have smart friends!!)

The following are Scott’s top 4 reasons to check your beneficiaries.

In the inheritance disputes we handle stale beneficiary designations can create numerous problems.? Some of the more common issues we see include:

1.????? Probate. If you fail to designate beneficiaries or fail to fully designate the entire 100%, it is likely your assets, or that portion you did not designate, are going to have to go through court-supervised probate administration before they can be distributed to your heirs, a timely and costly process.

2.????? Claims by your new spouse: If you’ve married since the last time you updated your beneficiary designation, your new spouse may have a claim against the proceeds under any number of theories. Updating your beneficiary designations post-marriage ensures what you intend is followed.

3.????? Claims by your ex-spouse: If you’ve divorced your spouse but failed to update your beneficiary designation you are inviting them to assert “rights” (even those they likely do not have), which only delays distribution and can add costs if those claims need to be litigated.

4.????? Claims by omitted children: If the last time you updated your beneficiaries was before you added your most recent bundle of joy you can expect them to feel not only unloved but the need to lawyer up to assert their rights.

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Complete your beneficiary designations and review and update them often, at least annually, and whenever a life event happens that impacts how you want your assets distributed to your loved ones.

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I try not to go into too much detail with things that have happened throughout my career, but I’ll give you some perspective.? During my 17-year career, I’ve had to process ~7 death claims.? All the claims but 2 had proper beneficiary designations.? The two that didn’t ended up having benefits paid out to spouses that were separated/divorced and both times the families got attorneys involved. ??

I’ll leave you with this synopsis of the last month, on how I pick benefits:

Medical – buy based on what you use. If you do the math (your monthly cost + out of pocket max) and you come out ahead in a worst-case scenario – take the higher deductible.? Better to pay for services used than extra premium for a plan you don’t utilize.

HSA – if you can enroll in an HDHP and fund an HSA account, do!? Especially if your employer incentivizes you to use it.

FSA – Enroll what you use!? Remember, you could lose it if you don’t use it all up. If you’re also utilizing an HSA, you’ll elect a Limited FSA for dental and vision only.

Dental – Don’t skimp! Healthy teeth are vital to a health heart. Take care of them

Vision – Nice to have not a necessity as you can get great glasses from most warehouse clubs at a decent price.

Life Insurance – (don’t forget the AD&D). Update your beneficiaries and make life insurance part of your financial plan.? See the comments of my last post for stellar advisors who can teach you to use life insurance as a vehicle, not just to insure your life, but to fulfill your financial goals.

Short-Term Disability – Buy it!!? Read the fine print though, because you might live in a state that already has some coverage and you want to understand how what you buy works with what you’re already covered by.

Long-Term Disability – So vital. Enroll. Update your beneficiary, this has a survivor benefit too.

Accident, Critical Illness, Pet, Long Term Care – these are up to the individual person, what they can afford, family history AND their level of risk tolerance. I personally like these benefits, but not everyone does.

Employee Assistance Programs – You should get these automatically at most companies when you have disability.? Find out how it works and leverage the coverage.?

That’s it this week.? Until next week, be well.?

If you have a topic you want to review or don’t know how the claims process works, let me know.? We tackle claims, care management and patient advocacy next.