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Published on October 18th, 2018 | by Billy McCarthy

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What’s in a name? A lifetime of hard work

So what’s in a name?

Before we answer the question posed above, let’s enjoy a short story, shall we?  Once upon a time, there was a happily married couple. Let’s call them Jack and Diane. (They were two American kids growing up… ah…never mind, you’re likely too young…) Anyway, after two less than blissful years – life happens – and Jack and Diane are married no more. Two years later, both have remarried, both have kids from those new marriages and life is grand. 

Fast forward 45 years…

Sadly, Jack has a debilitating ornithology injury that eventually takes its toll, and Jack passes away. He leaves behind a million dollar 401(k) that he started shortly after his first marriage to Diane. Believing all is in order, Jack’s second wife, Jenny, takes comfort that their financial house is in order.  This is where it gets interesting. A long time ago, when Jack started contributing to his company’s 401(k) plan, he was asked to provide a beneficiary for the account.  The name he wrote down was that of his firstwife, Diane. Makes sense, right? After all, that was his wife – at that time. The million-dollar question is this:  Did Jack update his beneficiary form after “life happened”? If not, Diane is still the beneficiary of record.  And that beneficiary form is recognized as the last will and testament for that 401(k).

And this is where it gets messy.

As if the grief of losing a loved one isn’t bad enough, lawyers for both sides are now preparing for battle – a battle that could have easily been avoided had that beneficiary form been updated. [Note: state laws may differ on how valid a case the ex-spouse may have.]  So what’s in a name? Possibly, the rights to the single largest asset you’ll ever have. Check your beneficiary designations on your retirement accounts and your life insurance policies every year and keep a copy of that document for your records. You can change them – unless you’re dead – at any time, with a 3-second stroke of the pen. And I can assure you, that will be time very well spent…long after the thrill of livin’ is gone.

Billy McCarthy is a Wealth Manager with CapSouth Wealth Management in Dothan, Alabama.

Contact Billy at 334.673.8600 or online at capsouthwm.com.

Investment advisory services are offered through CapSouth Partners, Inc., an independent Registered Investment Advisory firm. Nothing contained in this article is intended as, nor should be construed as, an individual investment recommendation.


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