Who Will Inherit Your Retirement Accounts?
There are a number of different ways to save for your golden years. Some types of retirement accounts are:
- IRA – Contributions are tax deductible and taxes must be paid when the funds are withdrawn.
- Roth IRA – Contributions are taxed in advance instead of at the time of withdrawal.
- 401(k) – Contributions are made pre-tax, and therefore are subject to taxes when withdrawn. In addition, a penalty is imposed if funds are withdrawn earlier than age 59 and 6 months.
The question arises, however: what if you pass ways with money in a retirement account? Who gets it?
Where Your Retirement Accounts Go
The normal process when setting up a retirement account is to designate someone who would serve as a beneficiary and inherit any remaining funds. If you do designate a beneficiary on a retirement account, this will supersede your will. For example, if your retirement account beneficiary is your mate, but you later divorce and leave everything to your kids in your will, you will have to change the beneficiary on the retirement account as well, or your ex will still get that money.
In other words, a retirement account is not a probate asset, so your executor will have no say in what happens to it. You have to make that decision now by keeping your beneficiary up to date.
Having the Proper Estate Planning Attorney on Your Side
In order to ensure that all of your wishes will be carried out, you want the advice of an estate planning attorney who can help you to understand how these little details work. The experienced estate lawyers at Petrov Law Firm can help you plan for the future of your heirs. To learn more, call 619-344-0360 today.
