This may come as a surprise, but guaranteeing that your loved ones get the inheritance you meant for them requires more than a will. Conditions in a will are superseded by the beneficiaries listed on financial assets such as IRAs, life insurance policies and bank accounts.

Our lives are so busy, we forget to pick up milk at the grocery store, let alone change our beneficiaries. You may divorce, for example, and fail to remember that your ex is the recipient on the IRA you set up 20 years ago, or that his name is on the title to the home you supposedly won in the settlement. Here's how to protect yourself and your heirs:

Do an annual review. If you've married, divorced, or had children, you'll want to update your beneficiaries. Contact the account administrator at the bank, brokerage house, or mutual fund company and ask customer service to confirm who is currently listed. If you need to make a change, request the proper form, write down the new designation (typically, you need that person's Social Security number and birth date), and sign on the dotted line.

Set up a trust. We've covered this before, but it bears repeating: Create a living revocable trust, and make that trust the beneficiary of all your sizable assets (including your home). This will ensure a smooth transition. While you're alive, your assets remain completely in your control.

Designate wisely. Never make an underage child the beneficiary of your life insurance policy. If you die, the insurer will force your relatives into court to get someone appointed as a guardian of the estate (this is separate from any guardian you may have specified in your will to care for your children). That's going to take time and money, and your heirs will still have a major headache: The court may demand that the funds be placed in a "blocked" account that requires approval for withdrawals. Every time your children's guardian needs money, she'll have to go to court (that usually means hiring a lawyer and spending more cash) to request it. Again, the solution is to make your trust the beneficiary. Insurers will happily transfer the money to the trust, and the distribution of assets will be handled exactly as you specified. That's going to be a serious benefit for your heirs.


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