On behalf of Lang Law Office posted in Estate Administration & Probate on Friday, January 10, 2014.

While it may seem like a bit of a cliché, many people continue to make — and stick to — resolutions for the new year. For some these resolutions are directly related to their physical health and may include losing weight, quitting smoking or exercising more. For others, however, these resolutions may relate directly to their financial health, meaning they have vowed to get their monetary and legal issues in order over the next 12 months.

As an example of how this might play out, a person might resolve to revisit their comprehensive estate plan covering everything from how they would like their assets to be divided upon their demise to their wishes regarding healthcare and guardianship of their children.

This is certainly a very good idea given that life circumstances and personal attitudes can change over the course of time. However, experts warn those looking over their estate plans not to overlook a key step during the review process.

Specifically, experts urge those reviewing their estate plans to take the time to ensure that the beneficiary designations made on everything from retirement plans and life insurance policies to bank accounts and annuities are accurate.

What makes this step so crucial, says experts, is that beneficiary designations are essentially considered sacrosanct under the law, meaning that they will be carried out exactly as they are written, even if your will indicates otherwise.

Experts argue that another incentive for updating beneficiary forms is that you can designate secondary or contingent beneficiaries who will receive the assets in question should the primary beneficiary pass away before you. This is significant because if no other beneficiaries are named, the assets will be settled in probate, which can prove to be costly and time-consuming.

Finally, while the idea of updating beneficiary forms may sound tedious, experts indicate that it can frequently be accomplished via forms downloaded from the Internet. Furthermore, if you are uncertain as to which financial institutions to contact, they advise that 1099 tax forms provide a strong reference point.

To learn more about probate, insurance or comprehensive estate planning, consider contacting an experienced attorney who can answer your questions and help outline your options.

Source: Forbes, “The big estate-planning goof you may be making,” Harper Willis, Dec. 16, 2013