The Importance of Updating Your Beneficiary Designations

Imagine leaving a significant amount of money to someone you haven’t spoken to in decades—someone who isn’t even part of your life anymore. It sounds far-fetched, but this exact situation unfolded when a man named Rolison passed away in 2015. His $1 million retirement account was set to be inherited by an ex-girlfriend he had broken up with almost 40 years earlier. How did this happen? Rolison simply forgot to update the beneficiary on his retirement account after their breakup..

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In 1987, Rolison listed his then-girlfriend, Sjostedt, as the sole beneficiary of his workplace retirement account. Fast forward to 2015, Rolison had passed away, and his brothers were shocked to learn that Sjostedt, who had long since moved on with her life and even changed her name, stood to inherit the entire $1 million. Despite their surprise and attempts to contest the beneficiary designation in court, Rolison’s brothers faced a hard truth: in most cases, the beneficiary forms on accounts like retirement funds, life insurance policies, and bank accounts carry more weight than a will. Even if these forms were filled out decades ago, they still stand unless updated.

Why Beneficiary Designations Matter

When you open a retirement account, take out a life insurance policy, or set up certain types of bank accounts, you’re required to name a beneficiary. This person will inherit the assets in the account when you pass away. What many people don’t realize is that these beneficiary designations override what’s written in your will. That means if you forget to update the beneficiary after a significant life event, like a breakup or a marriage, your assets could end up in the wrong hands.

Steps to Make Sure Your Beneficiary Designations Are Current

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