Review and Update Your Retirement Plan Beneficiaries

Retirement accounts are an important part of your overall estate plan. However, there is always the possibility that you may pass away before the funds in your retirement accounts are exhausted for your own personal needs. Therefore, it’s key that your retirement accounts accurately reflect beneficiaries who you would want to inherit the account in the event of your untimely passing. This is something that should be reviewed frequently as part of your estate plan.

Things to Consider When it Comes to Your Retirement Plan Beneficiaries

If you have never added retirement beneficiaries to your accounts or you need to update them, there are several things that you need to take into consideration such as:

• Who you are naming
Keep in mind that, depending on who you name as your beneficiary, there is a possibility that this designation could potentially trigger a tax on your estate. Before you complete your beneficiary forms, the smartest thing that you should do is speak with an experienced estate planning attorney about the possible ramifications of this designation when it comes to taxes.

• Percentages
You don’t have to leave your entire retirement account to one individual. Instead, you have the flexibility to leave certain percentages or even certain amounts to your beneficiaries. In many cases, simply because a person may not know exactly the value of their retirement account at any given time so it’s easier to leave percentages to their heirs.

• Do you want your retirement account to mirror your estate plan?
There are some people who use their retirement account to provide for individuals that they may not have included in other assets that they are going to leave behind. For example, parents often leave their assets to their spouse or their children. However, they may also want to leave something behind to a grandchild or another family member. Therefore, they will use their retirement account to accomplish this goal. The retirement account will go to this other individual while the rest of their estate will be split according to their wishes in their Last Will & Testament.

Regardless of when you decide to update your retirement account beneficiaries, it’s important to understand that the process can take some time. Most financial institutions will require you to mail them the original beneficiary form which can take a few days, then it needs to be processed and checked by that institution which can take even more time. On average, it’s probable that your beneficiary form may not completely update for a number of weeks.

How Do You Change Beneficiary Designations on a Retirement Account?

An understandable question that may people have when it comes to changing or updating their beneficiary designations revolves around the process of being able to do this. The exact process is something that is listed by the company that manages your account. You will need to complete a form highlighting these new designations, signing it and possibly having it witnessed or notarized. These forms can sometimes feel overwhelming to complete and asks for a lot of information which is why it’s helpful to partner with your estate planning attorney for guidance.

Call Us Today for an Appointment

If you’re concerned that your beneficiary designations are not up to date, we encourage you to get in touch with our office. We have helped countless clients not only to develop their estate plan but also ensure that their beneficiary forms are in line with their wishes. If you would like more information, reach out to us today to schedule an appointment with our estate planning experts.