Editor’s note: This is the second column of a three-part series.

If you’ve ever spent time working through your estate plan, you know how important it is to select and update your beneficiaries. Failing to do so can result in costly mistakes — for you and your loved ones.

Here are five common mistakes that can easily be avoided with a bit of proactive planning:

Mistake No. 1: Not naming a beneficiary on all accounts

Ensure you have beneficiary designations on all of your retirement, investment and banking accounts, as well as your insurance policies.

If you don’t name a beneficiary on one or more accounts, your estate becomes the beneficiary of that account and your loved ones will need to go through the probate process (a legal process most families want to avoid for financial and emotional reasons).

If this happens, your relative can lose their ability to use “stretch” payouts based on their life expectancy because the tax-advantaged status for retirement assets is lost.

Mistake No. 2: Forgetting to name a contingent beneficiary on all accounts

Many people list the same loved one — usually a partner or parent — as the primary beneficiary on most or all accounts. If this is how you’ve handled your assets, it is important for you to also name a contingent beneficiary.

This is because if your primary beneficiary passes away first and no contingent beneficiaries are listed, it’s comparable to having no beneficiary designation. If you both die at the same time, funds go into probate.

Naming contingent beneficiaries also gives the primary beneficiary the option to execute a qualified disclaimer so some assets can pass to next-in-line loved ones.

For example, a primary beneficiary might not wish to claim the assets because of tax implications or because they don’t need the assets and prefer instead to pass your gift onto another beneficiary.

Mistake No. 3: Not using specific names

One mistake many people make is listing a generic term – such as children, parents or aunts – instead of specific names in their beneficiary selections.

This can be problematic, especially if you are part of a blended family. Many states won’t include or recognize stepchildren when the word “children” is listed.

Another risk of vagueness is that a family member you’ve lost contact with could enter the picture and try to claim a piece of your remaining assets. With this in mind, make sure you use full names of each person when naming beneficiaries.

Mistake No. 4: Failing to review your beneficiary selections regularly

Beneficiary designations override your will, so it’s crucial to keep them up to date.

You might need to update your choices every few years due to life changes, such as if beneficiaries have died or your relationship with them has changed. This is particularly applicable if you’ve gone through a divorce or remarried.

If your ex-spouse inadvertently remains the designated beneficiary of an account, he or she could have the upper hand if the case winds up in court.

Mistake No. 5: Not communicating your preferences with your partner and family

Communicating your legacy wishes is an important step to helping your loved ones know what to expect upon your death. While it can be tough to initiate the conversation, doing so can help reassure loved ones that you have a plan.

Keep in mind that you don’t need to share the exact amount of money you plan to pass down to respective family members, unless doing so is your preference. Instead, share high-level details that give your family insight into how you intend to share your hard-earned wealth.

Estate planning isn’t the most enjoyable part of planning for your financial future, but it is crucial to helping ensure that your assets are handled the way you desire after you no longer have control.

Beneficiary designations can be complex, and depending on your situation, it might be hard to decide who to list as the recipient of assets. If you want a second opinion or help assessing the implications of your options, consult an estate planner and financial adviser in your area.

Part three of the estate planning series will cover: Does a trust fit into your estate plan?