You could be unintentionally reducing your family’s wealth potential if you do not properly designate the beneficiaries of your IRAs. Improper estate planning could mean that your IRA assets could pass to the wrong people or entities, so how you execute your beneficiary designations is critically important.
Here are some of the steps that need to be taken to properly name IRA beneficiaries:
Spouse: A surviving spouse can either roll the funds into his or her existing IRA, or establish an inherited IRA and take distributions that will be calculated based on his or her life expectancy.
Children: Just like spouses, children can stretch required distributions from an inherited IRA over their own life expectancies.
Trusts: A trust can be named a beneficiary of an inherited IRA, but there are a number of complex issues involved, so be sure to consult with a Family Wealth Lawyer for guidance.
Contingent beneficiaries: A surviving spouse may wish to disclaim interest in an inherited IRA, so the assets can pass to children or grandchildren. Therefore, it is important to name secondary as well as primary beneficiaries for your IRA so assets remain within the control of your family.
If you’d like to learn more about how to properly designate retirement accounts or other financial assets for loved ones or have other estate planning questions, call our office today to schedule a time for us to sit down and talk.
This article is a service of Elena Ortega-Tauler, Family Wealth Lawyer. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.