BY ATTORNEY WILLIAM HAYES

Are you sure you know the beneficiaries under your will?

If you have really done your estate planning, I’m sure you know who the beneficiaries of your trust are.

But, are you clear as to whom you’ve designated as beneficiaries on your IRA, 401(k) or other retirement plan?

Have you clearly listed successor beneficiaries to your retirement proceeds in case the person slated to receive your benefits dies before you do?

There’s a good chance that you made your beneficiary designation many years ago. Are you clear who you named, and is that still the person you want to receive that asset?

Do you know where a copy of your retirement plan beneficiary designation is located? Do you even have a copy of your beneficiary designation?

If you’re like many people, you think you know what’s in your designation, but you’re not absolutely sure.

Let’s consider a hypothetical longtime employee that we’ll call Devon. Let’s say Devon has worked for a Kaiser Permanente hospital for the last 20 years.

When he first filled in the beneficiary designations on his retirement plan, he named his sister, Toi. Years later, Devon married Cherish and they remained happily married, and he continued in his career until his retirement.

After Devon’s death, Cherish was counting on receiving the proceeds from Devon’s retirement plan to support her in her golden years. Imagine her surprise when she discovered that she was not the beneficiary as she and Devon had both assumed. 

In fact, upon Devon’s death, the retirement system found his sister to be his beneficiary designee. Meanwhile, Toi had married Don — but Toi subsequently died.

Don was a real charming ladies’ man and Devon never appreciated the way in which Don treated his sister. The sister would have been the sole beneficiary of Devon’s retirement proceeds, but because she also has died, those assets would then go to Don, the “grieving” playboy husband.

The widow Cherish went to court to challenge this but lost, even on appeal. The courts found that the beneficiary designation remained valid, despite what appeared to be an unfair result. Don the playboy winds up with all of Devon’s retirement proceeds and buys a glass of champagne in honor of Devon whenever he’s out on a date.

This story is hypothetical, but I can assure you that it can and does happen on a regular basis.

You should check all your beneficiary designations periodically.

Many assets have such designations: IRAs, 401(k)s and other retirement plans, life insurance, annuities, bank accounts, motor vehicles, etc. An unintended or poorly thought out beneficiary designation can thwart your intended estate plan.

Talk about things that would make you roll over in your grave!

Be safe and review your documents with a professional to make sure you will get the result you intend.

William K. Hayes is a member of the American Academy of Estate Planning Attorneys. To contact Hayes, call (626) 403-2292. You can visit the Hayes Law Firm Web site at LosAngelesTrustLaw.com.

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William K. Hayes