Retirement Account Beneficiaries in Coral Gables

Retirement accounts are assets that require distribution in the event of your passing. To make sure no questions arise in that critical time, you need to list beneficiaries in advance. Similar to the rest of your estate, retirement accounts require your close attention.

Learning how to appoint retirement account beneficiaries in Coral Gables can help you make sure all the assets are distributed properly. An experienced estate planning attorney from Veliz & Associates, P.A. can guide you through the process.

Types of Retirement Account Beneficiaries

For clients in Coral Gables, it is important to remember that the retirement account beneficiary is not always a family member. Common types of beneficiaries may include:

• Primary Beneficiaries: These individuals or entities are first in line to receive the retirement account funds upon the person’s passing.
• Contingent Beneficiaries: If the primary beneficiary dies before or at the same time as the account owner, the contingent beneficiary receives the funds instead.
• Individual Beneficiaries: Spouses, children, and relatives are beneficiaries who usually receive more favorable tax treatment.
• Trusts: It is possible to designate a trust as the beneficiary to control how and when the funds are distributed.
• Charities: Nonprofits and charitable organizations can also be named as beneficiaries.

When choosing a beneficiary, the retirement account owner should consider a number of factors, including the age of the beneficiary and plan-specific rules. For example, some employer-sponsored retirement plans may require spousal consent if the account holder wants to name someone other than their spouse.

Beneficiary Designation vs. Will

If the Will states that certain people must receive the funds from retirement accounts, but the beneficiary designation is different, the latter always overrides the former. For example, if the decedent leaves the retirement account to the spouse in the will but names a child as a beneficiary, the child receives the funds.

Since some people in Coral Gables name retirement account beneficiaries before preparing their Will and vice versa, inconsistencies are possible. That is why it is important to update beneficiary designations regularly. In case the decedent does not name a valid beneficiary, the retirement account is likely to be distributed according to the Will or, in case there is no Will, intestacy laws.

IRA Beneficiaries

After the IRA owner passes away, how beneficiaries receive funds depends on two factors:

• Who is named as the beneficiary?
• When did the owner pass?

Usually, spouses have the most flexibility; they can roll the IRA into their own and name new beneficiaries. Non-spouse beneficiaries usually take annual distributions based on their life expectancy. While naming a trust can help control the way beneficiaries use the funds, it may limit tax advantages. Accordingly, many factors must be analyzed in advance.

As time passes and family situation changes, the IRA owner must update the beneficiaries. Otherwise, they may face unnecessary taxes and complications during probate.

Talk about Retirement Account Beneficiaries with an Attorney in Coral Gables

Naming retirement account beneficiaries in Coral Gables is an integral part of comprehensive estate planning. To make sure that your assets are distributed according to your wishes, you need to work with an experienced estate planning attorney.

At Veliz & Associates, P.A., we are a part of the Coral Gables community and have decades of experience with planning and drafting testamentary documents. We can explain how to name beneficiaries for each one of your retirement accounts and assist with keeping information updated. Call us to schedule an in-depth consultation about your estate at any time.