When was the last time you reviewed your nominated beneficiaries? This is one of those things that we don’t really give much thought to.
Certain life events such as marriage, or the birth of a child, often come and go without us giving any thought to who would benefit from our Financial Planning. Forgetting to update a policy or plan could unintentionally create hardship for your loved ones.
Over the years, I’ve been privy to several of these cases:
Mr. H divorced his wife of 10 years and went on to remarry. When he passed away, the newly widowed Mrs. H, was devastated to discover that she was not a beneficiary on any of her husband’s policies. She tried everything in her power to have the insurance company’s decision reversed.
Then as a last resort, she went to the Ombudsman for Long Term Insurance. However, because the policies in question were not Retirement plans, nothing could be done, and the first wife walked away R500 000 richer. Simply put, Mr. H failed to review his beneficiaries when he got divorced. Due to this oversight, a dependent of his was left with nothing.
In yet another instance:
I was approached by a young widow who had lost her spouse after only one year of marriage. Her husband had listed his mother as his sole beneficiary. Since she hadn’t taken kindly to her son’s new wife, she refused to pay anything to his widow.
I have found that when it comes to inheriting, the most common misconception is that if you’re married in Community of Property you’re automatically protected. This is simply not true, the only way to be sure is to check those beneficiaries.