Designate Beneficiaries For Your Investment Accounts

Thursday, September 3, 2009, 6:00 AM | Leave Comment

You have worked hard all your life and have saved for retirement. You hope to lead a comfortable life in your retirement and you have accumulated a variety of assets.

You have written out your WILL and have appointed a power of attorney to act on your behalf, your next task, should you decide to accept it, is to designate one or more beneficiaries for your investment accounts. Avoid ambiguity and be clear whom you designate.

First off, read A WILL can protect and preserve your assets, and then appoint a power of attorney to act on your behalf so that you can make the right decision about designating beneficiaries for your investment accounts.

You can do so for all your different accounts:

  • Retirement accounts such as IRAs, Roth IRAs, and SIMPLE IRAs

    Assets in your retirement accounts pass directly to the beneficiaries you have designated with your account custodian, trustee, or plan administrator.

  • Employer-sponsored retirement plans

    If you are married, keep in mind that most employer-sponsored retirement plans such as 401(k) automatically designate your spouse as the beneficiary unless you name another beneficiary(ies) and your spouse has consented in writing.

    Keep in mind that your beneficiary designations can supersede any accommodation you have made in your will for your retirement accounts.

  • Non-retirement accounts

    Designating a beneficiary on a non-retirement account, such as a brokerage account, may establish a “transfer-on-death” (TOD) registration for the account.

In a Nutshell
As with all accounts, estate taxes may still apply. Be sure to consult your tax adviser.

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