The Rodney Dangerfield of Planning: The Beneficiary Form

The beneficiary form could pose a serious danger to your financial and estate plan because its importance is frequently overlooked. Unless the estate is the beneficiary, a result which is not reccomended as it results in all of the IRA being subject to income tax at the death of the IRA owner, the IRA will not pass through a client’s will. Instead, it will pass through the direction in the beneficiary form.The beneficiary of an IRA is entitled to a use an extended withdrawl period for minimum distributions from the IRA which is typically the lifetime of the beneficiary. This option is lost when no beneficiary is named. Beneficiary form mistakes can result in hard-earned retirement funds ending up in the wrong hands or being lost to the government. Make sure you have this critical form on file with written confirmation of reciept from the IRA custodian. If a form cannot be found, don’t waste time looking for it. Completing a new one can be done quickly and costs nothing. Current and accurate beneficiary forms are an absolute necessity when it comes to transferring retirement wealth to the next generation.

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