When Academy Award-winning actor Heath Ledger passed away unexpectedly at 28, he left a grieving family behind, including a young daughter.

As a successful actor, he also left an estimated fortune of $20 million. And, because Ledger hadn’t updated his beneficiaries, his daughter wasn’t legally entitled to his assets.

You may not have $20 million at stake, but your savings through retirement accounts, annuities and life insurance policies are meant to benefit the people and organizations that mean the most to you. Keeping your beneficiary information updated is crucial to ensuring your lifetime of assets go to those you choose.

What is a beneficiary?

This is a person or organization you designate to receive your assets, both financial and physical, after your death. Your beneficiary doesn’t have to be a relative, and you can divide your assets among several people and organizations.

Why is it important to update my beneficiary?

Wealthy people aren’t the only ones with assets. Most people have funds and real estate they intend to pass on. How current your beneficiary information is can factor into where your assets actually go.

Example:
In 2000, an unmarried Joan began her career at U-M. With no spouse or children, she named her parents the beneficiaries of her life insurance policy and retirement accounts.

In 2002, Joan married Bill. They had a son and a daughter by 2006. Joan updated her will to include Bill and her children, but forgot to update the beneficiaries to her retirement accounts and life insurance policy.

By the time she passed away in 2019, Joan had accumulated $200,000 in her retirement accounts and had life insurance worth $2 million. She was still married to Bill, and their children were now adults.

After Joan’s death, who benefited from the planning and hard work she put into her retirement accounts and life insurance? Her parents, who had been named her beneficiaries back in 2000.

The lesson: Even though Joan’s will named Bill as her beneficiary, she had never changed the paperwork attached to her retirement accounts and life insurance policy. Since her parents were the official beneficiaries, they collected the $200,000 and $2 million.

Experts says Joan’s error is common. And costly, in terms of contested beneficiaries, family strife and legal fees.

How do I update my beneficiary?

Update your Fidelity Investments and TIAA retirement accounts, as well as your MetLife life insurance policy, here. You must update each policy separately.

When should I update my beneficiary?

Life changes are a good time to reevaluate your beneficiaries. Consider updating when you

• Marry or enter a domestic partnership/civil union

• Divorce

• Have or adopt children

• Experience the death of listed beneficiaries