Financial Wellness Tip: Take Time Now to Update Your Beneficiaries

Living in the moment can be very rewarding and enjoyable! It’s also important, though, to put a plan in place for the unexpected changes that can emerge in your life as well as for the inevitable- your expiration date.   

Start each new year off right by reviewing, and if needed, updating the beneficiaries for your life insurance, pension, IRA’s, 403b, 457b, 401k, SEP, SIMPLE, mortgage deed, etc. When changes like marriage, birth, divorce, and health changes happen, it’s essential to review, and if needed, make new decisions about who will inherit your assets.  

Naming your spouse as primary beneficiary can help to reduce or eliminate income and estate taxes. For example, a spouse is allowed to roll over a deceased spouse’s retirement accounts to an inherited IRA account and avoid current taxation.  

It’s good to designate both primary and contingent beneficiaries. Contingent or secondary beneficiaries will receive the asset if your primary beneficiaries pass away before you do. Life insurance benefits and other assets may not be released directly to minor children but may be released to a court-appointed adult guardian of the child’s estate. 

Naming beneficiaries for each asset can supersede those listed in your will and help deliver specific assets to your heirs more quickly by avoiding a lengthier probate process. See The Hartford Beneficiary Guide for more on legal guardianship and naming a trust or estate as beneficiary.

Estate planning experts also recommend putting in place an updated last will and testament, powers of attorney, a health care proxy, health care directive and a safe deposit box co-signer form. Distribution of a decedent’s assets without properly documented beneficiaries and a valid will are determined by life and accident insurance policy provisions as well as state law, which may not align with your current wishes.

For more information and assistance with these important tasks, please consult with your personal legal counsel, estate planning attorney, bank, financial institution, or a financial advisor.  

Advisors serving UNM who can provide complimentary planning and recommendations can be found on the Financial & Retirement Planning by Appointment webpage.

NMERB Beneficiary Designation

Active and inactive (non-retired) members covered by the New Mexico Educational Retirement Board (NMERB) pension must complete Beneficiary Designation – Form 42 to name or change a beneficiary. Visit the NMERB website for important details and requirements.  

Alternative Retirement Plan (ARP) members can make changes with Fidelity at 800-343-0860, and with TIAA at 800-842-2252.    

Employees currently enrolled in UNM-sponsored benefits with The Hartford should be on the lookout in January for a communication from The Hartford that will explain how to designate or update your beneficiaries for UNM-sponsored life and accident insurance on yourself and your dependents.  

The Hartford Beneficiary Guide and our life insurance webpage may be helpful resources. Contact The Hartford at 855-396-7655 or visit their website for assistance specific to your situation, or UNM’s Benefits & Employee Wellness at HRBenefits@unm.edu for more general information.