KEEP YOUR BENEFICIARY DESIGNATIONS UP-TO-DATE (FINANCIAL FOCUS)

This "Financial Focus" column is prepared by Edward Jones Investments, headquartered in St. Louis. Jones includes branches throughout the nation, including Cape Girardeau and Jackson.

If you've done any estate planning, you know that it's a "big picture" endeavor. After all, you're seeking to accomplish some important goals, such as ensuring spouses don't outlive their assets, reducing estate taxes, avoiding probate and supporting those charitable institutions that are important to you.

To achieve these and any other objectives you may have, you will put a lot of thought into your plans -- and you will probably work closely with your legal and tax advisers. These experts can help make sure your strategies conform to current estate and tax laws, but there's only one person who can make sure you're not overlooking all the significant details and that person is you.

One of the most important details you'll want to observe is whether your beneficiary designations are up-to-date. That means you need to review your life insurance, annuities, IRAs, 401(k) plans and other tax-deferred arrangements. All these vehicles are essentially contractual arrangements under which you name a beneficiary to receive benefits when you die.

If you name a beneficiary and nothing ever changes in your life, you won't have any problems. Unfortunately, many people name a beneficiary, forget about it and then don't make any adjustments, no matter what happens, but your life can change, either through marriage, divorce, remarriage or death. When any of these events occur, your original beneficiary may no longer be the person you would have wanted to collect the proceeds. That's why it's a good idea to update the beneficiary designations on all your insurance policies and retirement plans every few years.

However, before changing the beneficiary on your life insurance or any retirement plan, you'll want to discuss such a move with your estate-planning attorney. Be aware changes in the beneficiary designation of your retirement plan can have estate tax and income tax consequences. In addition, you'll need to work with your estate-planning adviser to ensure the beneficiary designation and the policy ownership of your life insurance are coordinated.

You'll also want to periodically review beneficiary designations to make sure they're aligned with your estate planning documents. For example, suppose you decide to establish a living trust, which may offer you significant advantages, depending on your situation. For one thing, a living trust gives you far-reaching control over how your assets are distributed. Furthermore, assets held in a living trust can pass directly to your heirs without having to go through the time-consuming and expensive process of probate. To maximize the effectiveness of your living trust, you'll want to make sure the financial assets contained in the trust have the correct beneficiary designations. Again, your estate planning adviser can help you in this area.

A careful review of your beneficiary designations could benefit your family immensely in the future. So take the time to do what needs to be done -- you'll be glad you did.

The Southeast Missourian does not recommend that readers buy or sell stocks featured in this column, which is provided for informational purposes only.