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Estate Planning

Retirement Account Beneficiary Designations: Critical Estate Planning Tools

By April 1, 2015No Comments

A generation ago, a family’s most valuable asset was its home.

Placing that property in the names of both spouses, with rights of survivorship, usually protected its disposition at one spouse’s death.

A home, of course, is still a significant asset. For more and more people, however, retirement accounts, including IRAs, 401(k)s and (for those lucky few) pension and profit sharing plans, hold the bulk of their assets.

According to the Investment Company Institute®, total U.S. retirement assets were $24.2 trillion as of September 30, 2014. $7.3 trillion were in IRAs alone.

This fact underscores the importance of ensuring that all retirement accounts have proper and regularly updated written beneficiary designations.

When the owner of a retirement account dies, the account’s assets pass outside of that person’s will.

Like insurance proceeds and other non-probate assets, they are paid to the beneficiaries designated in writing by the account’s owner.

So, the same amount of care should go into determining who will receive assets under a will as who will receive retirement assets.

Prevent a potential economic tragedy. Review and update your estate plan, including your beneficiary designations, with your FOS attorney.