Building your assets to prepare for retirement is a demanding process, but experts encourage Americans to thoroughly review their beneficiary list before making any major decisions. Estate administration plans rely heavily on beneficiary designations when distributing property. An outdated plan can cause confusion and resentment among surviving family members and friends.

Beneficiaries on insurance and financial accounts generally overrule any decisions you have on file in your will. Experts say that maintaining an updated list of beneficiaries can prevent disputes when the time comes to distribute your assets.

Remember to review your beneficiary designations after every major life event such as a marriage, birth, divorce or other domestic change. Any actions with your 401(k) or Roth IRA should warrant a review of your beneficiary list. Also, you might need to change the beneficiaries if you make any modifications to your will or estate plan. Your will may be affected by changes you make to insurance or financial beneficiary lists. A qualified attorney should be able to tell you whether these documents are in sync.

Attorneys say that two types of beneficiaries can be named for insurance and financial payouts. Primary beneficiaries are the first in line to receive the assets. These generally include immediate family members such as spouses, children or other close relatives. You can choose whether to bequeath the entire amount of the account to one person, or perhaps divide the assets among several parties.

Secondary beneficiaries serve as contingent parties in case no other beneficiaries are surviving. These can include charitable organizations, schools and other entities that will endure even after an individual family perishes.

Beneficiaries are useful because they are effective immediately after death and override any designations given in a will. This eliminates the need for expensive probate court disputes.

Experts recommend maintaining copies of your beneficiary list in your personal records. Make sure that you check with your financial and legal advisers before submitting any changes to make sure that the modifications will have the desired effect.

Luis E. Barreto