'Tis the season to bond with loved ones -- to sip hot toddies by the fire and hope that none of your regifts are recognizable to this year's recipient.

As long as you're filling out gift tags and place cards -- and before visiting family members start getting on your nerves -- it's a good time to check and see whether you've jotted down the right names on your beneficiary forms.

Drudgery? Yeah, sure. But if you really need a break from the "family dynamics" for a while, updating your beneficiary forms is an awesome excuse for why you disappeared for a few hours.

Which accounts need beneficiary designations?
Any assets disbursed outside a will or not accounted for in a trust require a beneficiary designation. That list includes common kinds of accounts we all have, such as:

  • Retirement accounts: IRAs, 401(k)s, 403(b)s, 457s, pensions, and self-employment retirement plans (e.g., Keoghs).
  • Banking services: Credit unions, checking accounts, and savings accounts.
  • Insurance proceeds: Disability and life insurance policies.
  • Other stuff: Annuities and financial services products.

If you haven't checked on your beneficiary form designations lately -- and particularly if you've gotten married, unmarried, had kids, lost a spouse, etc. -- put this on your must-do list.

Who wants my stuff when I die!?
Before you dash off your spouse's name, or put Junior's Social Security number on the dotted line, make sure you're not making any of these mistakes:

  1. Assuming your will is going to take care of all the details.
    Beneficiary designations always trump what's in a will. These documents must be consistent with one another: If you set up a trust, designate the trust as the beneficiary, not the person you named in the trust to inherit the money.
  2. Subjecting your heirs to an avoidable tax bill.
    Failing to name beneficiaries on your IRA (or consigning it to your estate) risks robbing your heirs of the ability to maintain tax-advantaged growth over their lifetime (via a stretch IRA). Without a beneficiary, your IRA money will go through probate, and your family (excluding spouses) will typically be required to withdraw the money within five years. Most beneficiaries don't even wait that long: They take hold of the entire IRA at once. Doing so not only incurs an immediate tax bill, but also subjects all subsequent earnings and capital gains to income taxes. On a $100,000 inheritance earning $5,000 a year, anyone in the 25% tax bracket just bought themselves an annual tax bill of $1,250.
  3. Forgetting to update forms when life happens.
    Just as bad as failing to name a beneficiary is not updating designations when beneficiaries marry, divorce, come of age, or tick you off. That's how exes and bitter sisters-in-law strike it rich.
  4. Not having a plan B.
    If your primary beneficiary isn't around to collect, and no secondary beneficiary is named, the court decides who gets the dough. Be exact. You can name multiple primary and secondary beneficiaries, so don't be afraid to spell out how you want your assets divided.
  5. Naming minor children as beneficiaries.
    Until age 18 or 21 (depending on state laws), minors can only inherit limited amounts. Designate a financial guardian or set up a trust for the kiddos. Either should have detailed directions on how to manage the windfall until the children are of age.

The best thing about updating your beneficiary forms is that once you're done all those annoying things your family's doing in the other don't seem like such a big deal after all.

As long as you're making lists and checking things twice, here are...

Taking care of paperwork is just one of the things you need to do to protect your assets in retirement and beyond. To learn more, click here to read the Fool's new special report, The 7 Secrets to Salvage Your Retirement Today.

When Dayana Yochim needs a break from party chaos, she clears her place and excuses herself to go wash the dishes. Which is sometimes awkward for restaurant staff. When you get a free moment, the Fool's disclosure policy is ready for the check.