Nowadays, it’s very common to have a blended family. But how do you address the question of beneficiary designation when it comes to your blended family? Are you inadvertently disinheriting your own children based on your beneficiary designation?

Life insurance inherently includes estate planning. Every single life insurance policy includes a beneficiary designation where the death benefit will be passed on to the named beneficiary of that policy when the insured dies.

Now, here’s the key. It passes outside of probate and it passes, in most states, outside of state inheritance taxes.


So it’s very important. But what’s also important is the fact that you should make sure that your beneficiary designations are exactly the way you want them. You want to make sure that what you want to have happen will happen, even if you’re not here to see it happen.

In the case of blended families, a lot of times the husband will have the wife as the beneficiary and vice versa. And then, if it’s a blended family, they’ll have their own children named as contingent beneficiaries. But this could pose an issue down the line.

We had this exact situation just come up. The husband named the wife is the beneficiary primarily the wife named the husband as the beneficiary primarily. And then they each named their own children as contingent beneficiaries. But what happens when one of them dies first, their death benefits are going to go to the other spouse.

And that’s where the problem lies. His death benefit goes directly to his wife since he’s no longer alive. The wife’s death benefits go to the children, along with the death benefit that she received as a beneficiary of his policy. So her children were going to get everything and his children were going to get nothing.

We brought that to their attention and just said, “Hey, not sure if you know this or realize this, but this is the way it’s going to work. Is that what you want?” And they immediately said, “No, that’s not what we want.”

So the next step is for you to go to your estate planning attorney and get documents drafted up to make sure what you want to have happen will happen, even if you’re not here to see it happen. No one wants to inadvertently disinherit their children.

The value we were able to add to this couple was that we brought out or we brought up the point of how the money was going to flow. And again, when you look at things through the lens of cash flow and being in control of your cash, when we brought that point up to them, they were saying, “Hey, that’s not what we want. How do we change this?”

Awareness is the first step and then you have the power to make the changes necessary to make sure what you want to have happen, to happen, even if you’re not there to see it.


If you’d like a policy review or a review of your beneficiaries, check out our website at and feel free to schedule your free strategy session today.

And remember, it’s not how much money you make. It’s how much money ,you keep that really matters.