Anyone holding a policy with a payout upon the death of the policy holder must designate beneficiaries to inherit the funds. In addition to naming beneficiaries for life insurance policies, retirement plans, annuities and IRAs, California residents should carefully consider how they select their heirs. To preserve a legacy, careful estate planning is essential.
An annual review of beneficiaries helps to ensure that documentation is up-to-date. The recent loss of a loved one may necessitate changing the heirs in a life insurance policy or another asset. Other major events, such as the birth of a child or grandchild, buying or selling of a home, divorce or marriage, should spark a review of beneficiaries. If any of the heirs have special health care needs, the estate holder may wish to create a special needs trust that will be managed by a trustee appointed by the creator of the trust.