Amid the flurry of mergers and acquisitions in the financial services industry, there’s no guarantee they’ll be able to produce the document when it matters most. Without an IRA beneficiary form, the courts have no choice but to subject your heirs to the faster payout schedule, causing them to miss out on the tax-deferred stretch IRA.
Get a copy of your beneficiary form from your IRA custodian, keep it in a secure location (fireproof safe at home, deposit box at the bank or scanned file) and .
From failing to update their document after a divorce, to forgetting to name a beneficiary, such financial fumbles can force future generations to surrender too much to Uncle Sam — or worse, deny them their rightful inheritance.
“It happens more often than you’d think,” says CFP professional Joel Larsen, principal with Navion Financial Advisors in Davis, California.
If you live in a community property state, for example, you can’t name someone other than your spouse as a primary beneficiary without obtaining a notarized release from the spouse.
“So often, people don’t go back and look at their financial paperwork,” says Larsen.
If you die before your child reaches adulthood, the court will appoint a guardian for you to oversee those assets until he or she reaches the age of majority. The estranged spouse.” When choosing a minor child as a beneficiary, he notes, consider how you want that money controlled and select your own trustee or guardian.
You did everything right: named a beneficiary, kept your forms current and created a trust to rein in reckless spending.
After you die, the money in your account belongs to your beneficiary.
But you didn’t tell your loved ones where to find the paperwork. Even the most bulletproof beneficiary form won’t help your heirs if they can’t track it down after you pass away.
And don’t assume that your bank or brokerage firm has a copy.
It allows you to make minor deletions or additions to the original Trust document and should be kept with your original Living Trust document.
You should distribute a copy of the Amendment to anyone who holds a copy of the original Living Trust document.