My IRA is Going Where?

My IRA is Going Where?

By Gerry W. Beyer Share

J. Sabrina Go & Grayson Chester recently published an article entitled, Unintended Beneficiaries of Retirement Accounts, or: “My IRA is Going Where!?”, Rehrberg Law Group, PLLC, (2020). Provided below is the introduction to the Article. 

Throughout your life, you were probably told time and again to save for retirement. Many of you followed this advice. You took advantage of methods blessed by state and federal governments with preferential, qualified tax treatment. You contributed to a 401k plan (if available), or you put money in a Traditional or Roth IRA. If there are any leftover savings in these accounts when you pass, you are able to direct where they should go by way of a beneficiary designation. Like with most areas of estate planning, it is important to keep your beneficiary designations up to date with current goals as well as current laws.1 A failure to update a beneficiary designation can result in disastrous unintended consequences, including unintended beneficiaries. In the wake of the recently-passed Setting Every Community Up for Retirement Enhancement (“SECURE”) Act, it is now more important than ever to make sure that your qualified retirement accounts benefit the people and causes you want—and to prevent unintended beneficiaries from ever profiting off of your success. 

There are several ways in which you, as the retirement account owner, could have unintended beneficiaries on your retirement accounts that will be discussed in detail below: (1) You and your spouse have a prenuptial or postnuptial agreement that could conflict with the IRA contract; (2) You did not name a properly-designated contingent beneficiary on your retirement account; (3) You did not name a successor beneficiary to an inherited retirement account; (4) You may be creating a direct line for a creditor to access your beneficiary’s pocket; (5) You named a minor as a beneficiary; or (6) You do not review or update your beneficiary designation

What Now?

Estate planning is complicated and ever-changing. The best advice? Consult your accountant, attorney, financial planner or insurance representative to get the planning advice you need for your specific situation. Contact us today if you’d like us to point you in the right direction.

Remember: state law often governs these documents. Thus, it is important to get advice from an expert who understands the laws in your area.

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This website is not intended to be a source of solicitation or legal advice. General information is made available for educational purposes only. The information on this blog is not an invitation for an attorney-client relationship, and website should not be used to substitute for obtaining legal advice from a licensed professional attorney in your state. Please call us at (626) 403-2292 if you wish to schedule an appointment for a legal consultation.

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William Hayes

As an attorney in private practice in Los Angeles County, California William Hayes provides extensive estate and tax planning services to individuals and businesses in Los Angeles, Pasadena, Glendale, Burbank and surrounding communities. Attorney Hayes’ primary focus is to help clients avoid probate, protect their assets, and provide for the security of their loved ones with a well-crafted estate plan. He believes in giving each client the time needed to explain his or her needs and wishes and then dedicates his efforts toward making the client’s desires clear in their final estate plan.

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