Partner hasn’t put me as a beneficiary. Is this a red flag? 🚩
Beneficiaries can override a will, so you better choose wisely.
“If my partner hasn’t put me as a beneficiary and we’re together for 8 years, is that a red flag?”
Before I answer this question, it’s important to quickly decode the jargon.
TRANSLATION TIMEOUT: What is a beneficiary?
A beneficiary is the person who gets your money when you die. That’s the simplest definition. You can designate a beneficiary on all your financial accounts (checking, savings, investments, 401(k), life insurance, a pension, etc, etc, etc). There are sometimes terms like Payable on Death (POD) or Transfer on Death (TOD), but all roads lead back to designating a beneficiary. You can also put more than one beneficiary on an account, which is a good idea in case your top pick dies with you…. (Morbid, I know, but it’s important!).
Quick answer
Are you married? If so, yes, a huge red flag. Why wouldn’t your partner have you, their spouse, as the primary beneficiary?
If unmarried, then no, it doesn’t have to be a red flag. If you both work, you don’t share any major assets, haven’t co-signed on debt, and are child free, then there’s not necessarily a need for you to supersede other family members as the beneficiary.
If you share a home together and the loss of your partner’s income would make it impossible for you to keep paying rent, then that should be a conversation about being a beneficiary to at least cover the cost for a period of time after death. That’s certainly fair.
Detailed answer
If you are co-signed on debt with anyone (e.g. parents, romantic partner, sibling), then the co-signer should be a beneficiary on one of your accounts for at least the amount that covers the debt. Or you should be the recipient if you are the co-signer and yes, this should be part of your discussion before co-signing on debt!
For example, your parents co-signed on a private student loan for your education to the tune of $12,000. In the case of your untimely demise, your parents are on the hook for that $12,000 + interest. (You should always read the fine print to know if debt is discharged in death or not.) Even if you’re married, it’s important to have your parents as a beneficiary on some account for the amount that covers your debt. In most cases, you can designate multiple beneficiaries, so it’s easy to say “my parents get 15% of my 401(k)” or whatever the case may be.
Peach (my husband) and I were together 8 years almost to the day when we got married and he wasn’t the beneficiary on any of my accounts and vice versa until literally the day after we got married. Truly, I updated my beneficiaries the next day.
If you’ve never set beneficiaries on your financial accounts, let this be the reminder to do so! Checking, savings, investments, 401(k), pension, IRA, life insurance – truly any financial account you have. Go set it up right now! You generally need the government name, Social Security number, birthday and address of your beneficiary.
A beneficiary can override a will, so it’s important you check-in on your beneficiary designations after any major life changes such as marriage, divorce, birth of a child/niece/nephew, death of a loved one who was a beneficiary. I once had a professor who was the financial advisor for an ex-wife of a man who married his mistress. He died unexpectedly and never updated his beneficiaries after getting re-married, so his first wife got it all!
To Recap:
No, it’s not a red flag if you aren’t married and have no co-signed debt.
If you share any major assets (like a house) or have children together or you co-signed on debt, then you better be a beneficiary on some – if not all – accounts!
Update your beneficiaries after major life events (or just check-in on them annually as part of your overall financial health check-up!).
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