For many Americans, the majority of non-real estate assets are their retirement accounts and life insurance policies. However, a large number of people forget to update their designated beneficiaries, which can lead to key assets going to unintended beneficiaries. An unusual fact pattern cited here reminds us of the importance of keeping beneficiary designations up-to-date.
Like millions of hardworking Americans, Austin Hardy's employer managed his retirement plan. Hardy may have been absent on the date that the HR department explained the importance of naming a death beneficiary for his plan; he either forgot or neglected to designate a beneficiary.
When he passed away, Hardy’s employer did the right thing: it followed the default rules of the plan. Those rules stated that if no surviving spouse or partner existed, then the plan should pass to a surviving child, whether biological or adopted.