If you’ve read this far in our series, you may be thinking,
“wait a minute, couldn’t I just rely on my will or trust to deal with my
retirement plans?” This would be a grave error. Remember that the beneficiary
designation of a retirement plan will determine the recipient of the plan
benefits—not your will or trust. For
instance, if a trust or will names a charitable beneficiary, but a beneficiary
designation names certain individuals, the retirement account will be
transferred to the named individuals and not to the charity. This could
possibly undermine the tax planning of certain individuals by, for instance,
reducing the amount of anticipated estate tax charitable deduction available to
the estate.
Conclusion: It Pays to Pay Attention
Wrapping up our series on beneficiary designations, remember that choosing
a retirement plan beneficiary designations may appear to be a simple process. After
all, one only has to fill out a few lines on a form. However, the failure to
choose the “right” beneficiary may result in unnecessary tax, probate
proceedings, or worse—undermining the original purposes of your estate plan.
The best approach is to work with a trusts and estates attorney who is familiar with designation forms.
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this website and associated websites may not be used or referred to in the promoting,
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