Check your Beneficiary Forms

By Brad PistoleFOXBusiness

Do you know what the most important part of your retirement account is? The answer might surprise you!

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If you were asked today to pull out the beneficiary form for each of your financial accounts, could you do it? Could you quickly and easily locate the designated beneficiary forms for your IRA, 401k, or 403b plan? How about your checking, savings, money market or CD account? How about your life insurance policy or annuity?

If your answer to any or all of the above is:

  • "My bank knows where they are."
  • Or, "I'm sure my company has it on file."
  • Or, "the insurance company is required to keep that"

Then keep reading!

The #1 mistake that will cost your family thousands in future taxation and court costs regarding IRA and 401(k) accounts is improperly filled out beneficiary forms. If you think you're ok either way because your will or trust has been established and clearly states who your beneficiaries are, think again.

The beneficiary form trumps all other legal documents, and mistakes are made every day regarding beneficiary forms. Here are some questions you need to ask yourself regarding your retirement accounts and if you don’t know the answer, putting it off till tomorrow could cost you and your family thousands:

  • Do you know the difference between a beneficiary and a designated beneficiary?
  • Do you know what happens to an IRA when a "non-person" is named as the beneficiary, such as an estate or trust?"
  • Do you know what happens to an IRA that passes on to a "non-spouse?" What if your beneficiaries are 3 or 4 "non-spouses" such as children or grandchildren?
  • Do you know whether or not a 401(k) can be "stretched" for future distributions to your family if the asset is left in the company plan and not rolled over to an IRA before the owner dies?

If you didn’t know the answer to all of the above questions, you should schedule an appointment with a properly trained advisor to have your policies reviewed and have your beneficiary forms updated immediately! Future taxation and distributions from all of your retirement accounts depend on the information found on this one little page which is often misplaced and overlooked. Paying attention to this detail can make a huge difference in the outcome of your retirement accounts for you and your heirs.

Brad Pistole is the President and CEO of Trinity Insurance & Financial Services, INC located in Ozark, Missouri. He is an Ed Slott Master Elite Advisor with Ed Slott & Company LLC, and the host of the weekly radio show Safe Money Radio in Springfield, MO. For more information check out his company website at or email him at