I have written previously about IRAs and the need to update periodically your beneficiaries on your IRAs. I keep seeing this problem come up, so I thought I would say something about it again.

The first point I want to make is that  there are accounts other than IRAs which require beneficiary designations. If you have a  401(k) account, a pay on death account, or an annuity with a life insurance company,  for example,you may need to fill out a beneficiary designation  which states who gets the asset when you die.

The second important point is to  remember to update this beneficiary designation when something happens, such as a divorce or a death.  I recently handled a case in which the named beneficiary  was a son.  However, he passed away before  the owner of the account, and the owner  forgot to  name someone else to inherit  the asset if his son was not around. In this situation, the trustee of the account  usually requires  that you  transfer the asset through  the owner’s  estate, which usually means having to  go to court and open a probate. This can be time-consuming and expensive.   Moreover, the asset may be transferred to someone you didn’t want to receive the asset.   If you remember to name a new beneficiary, the property gets transferred  quickly to the person you want,  at little expense,  and without any court intervention.