What is a beneficiary review?

The beneficiary review is simply defined as: 

The identification of current beneficiary designations and other methods of property disposition, matching those against the client’s disposition objectives; and, if desired, assisting the client in completion of beneficiary changes as he or she directs; and, when appropriate, referring him/her to other professional advisors. 

Key to this process is that the client is always in control of his/her asset disposition. 

The role of a financial professional is to simply make the client aware of his/her current disposition plan and help them determine if their disposition plan meets their goals. Then, if needed and desired, provide referrals to the appropriate professional advisors. Since every state’s laws are different, the client’s tax and/or legal advisors should review recommended changes to beneficiary designations to ensure that they will have the intended effect in that particular state.

Purpose of the beneficiary review

For the client, the review is an opportunity to match current beneficiary designations with his/her desired disposition of assets:

  • Are all assets going to the desired person(s)? In the desired manner? 
  • Have “worst case” contingencies been considered and covered? Is the client sure? 

The beneficiary review guide can serve as a tool to assist financial professionals in helping clients answer these questions. 

The process of collecting data about client assets and their disposition will help financial professionals identify insurance shortcomings, and, in many cases, point to the need for a more detailed and separate insurance review and the potential for new business.