Why You Should Designate a Beneficiary for Each of Your Retirement Accounts
When a person passes away, his or her retirement accounts do not go through probate. Instead, retirement accounts are automatically paid out to a beneficiary who is selected by the account holder. What are the different types of retirement accounts that a person may have? Why should you periodically check to see who your beneficiaries are?
Which Retirement Accounts Have Beneficiaries?
If you have a savings account, this can be left in trust. Or you may have another person’s name on the account. However, retirement accounts like IRAs and 401(k)s are different. These should have a beneficiary listed on the policy. If you live in California and have an IRA or a Roth IRA, your spouse will be the beneficiary. The only way to designate someone else is to have your spouse provide written consent allowing you to designate another beneficiary. The same is true with a 401(k). Thus, unless your current mate has signed a waiver and you have designated someone else, he or she is the beneficiary.
Why Maintain Your Beneficiary List?
You should check on your beneficiaries periodically, especially if you experience a change in life circumstances. For example, if you get divorced, you will likely want to change the beneficiary on your retirement accounts.
Of course, your retirement accounts may not be the only thing that needs changing. You may have to update the beneficiary on a life insurance policy, amend a will, adjust a trust, and so on. For help with all of your estate planning needs, contact the estate planning lawyers at Petrov Law Firm. We can help you keep all of your records in good order so that your wishes are carried out properly. To learn more, call 619-344-0360 today.