By Julie Steinbacher, CELA*
I have a pretty large staff, and I love to hear their stories, especially about family get togethers around the holidays. In fact, at our staff party, we often share a story or two that helps each of us get to know a little more about the way we all enjoy our celebrations with families. One of my favorite stories was told by a staffer who had a big family, enjoyed getting together.The story she told was funny and went like this:
Her mom and her sisters had the idea of doing a name exchange for Christmas. (I like that idea!) Everyone drew a name and bought a gift, not spending more than a set amount. She drew her uncle's name. She knew he really liked Home Depot. Thinking this would make Christmas shopping easy, she planned to buy a gift card from Home Depot for his present, knowing it would make him happy.
She then relayed the part of the story that was the "uh-oh" moment. Her mom offered to pick up the Home Depot card for her uncle and wrap it up, since she was out shopping and also loved to wrap. She was planning to go to the mall to get someone a Bath & Body Works gift card, and Home Depot was next to the mall. It seemed like a good plan. The problem— when her mom wraps gifts, she apparently never writes the person’s name on the gift. She assumes she will remember who the gift is for, and that may be the case when the object she is wrapping has an identifiable shape. When you wrap a gift card, however, it looks like every other gift card you wrapped. I’m sure you can see where this is going.Her uncle was supposed to receive a Home Depot gift card. He opened a Bath & Body Works gift card instead.
For some reason, I was reminded of this story this past week when I met with my financial advisor regarding my retirement plan. My advisor had asked me to review my beneficiary designations to make sure they were what I wanted.
My first point is this: Make sure you identify who you want as your beneficiary. If you don’t designate a beneficiary, it is like wrapping a gift and not marking who is to receive the gift.
Second, make sure you review your designations at least once a year. Failing to review your beneficiary designations is like failing to make sure the gift you are giving is meant for the person who will receive it. An asset is like a wrapped gift. If you have more than one, after awhile, it may be difficult to remember who you intended to receive each gift. Designating and periodically reviewing beneficiary designations may seem trivial and unnecessary but then again, the mom in the story thought marking wrapped gifts with a name was trivial and unnecessary. She would remember which wrapped gift went to which individual, right? Unfortunately she didn’t, and you probably won’t either.
It is much easier to fix the situation where you give the wrong gift to an individual when you are still here to recognize the mistake. Unfortunately, you won’t have the same opportunity with beneficiary designations. Designating beneficiaries for retirement plans and reviewing those designations regularly ensures that you won’t give a Bath & Body Works gift card to someone that would appreciate, and benefit, from a Home Depot gift card much more.