5 IRA Mistakes You Need to Avoid
Many people have substantial assets in their IRA accounts that will eventually
pass to heirs. To ensure that as much of these assets pass according to
your wishes, be sure you are not making any of these costly IRA mistakes:
1. Misplacing the beneficiary form – if your IRA beneficiary form can’t be located after you
die, the default provisions of your IRA plan will decide who inherits.
The worse case scenario could be to have those assets default to your
estate, which would have adverse tax consequences.
2. Your beneficiary form is out of date – if you have divorced, remarried or just had a change of heart,
if your beneficiary form does not reflect the right person you want to
inherit your IRA assets, they will not inherit. Even if you have named
the rightful heir in your will, the person(s) named on the beneficiary
form will still inherit.
3. You have not named a back-up beneficiary – should the person you named as your IRA beneficiary die first
and a secondary beneficiary has not been named, the IRA will be liquidated
and taxed before going to your estate.
4. You have not taken advantage of the stretch – to enable the IRA assets to grow tax-deferred, you can have your
IRA beneficiary designation set up to extend payments out over the lifetime
of your heir.
5. Your assets are not protected – you can use a special trust to protect your child’s inheritance
from divorce, bankruptcy, debt collection or just poor money management.
The Dorcey Law Firm, PLC, provides effective retirement planning services to Florida residents.
Contact our Fort Myers law firm for your free consultation.