Review Your IRA Beneficiaries Annually

By Peter Sweetser

We all know that there is one thing you can count on in life ─ change. Therefore, we recommend that you annually review both your primary and contingent IRA beneficiaries.

Perhaps you have had changes in your relationships such as a wedding, the death of a loved one, or a divorce.  As the IRA distribution process occurs following your death, if the primary beneficiary is alive, your account will go to them.  If your primary beneficiary predeceases you, the account is distributed to the contingent beneficiary.  If you have not assigned a contingent beneficiary, then it goes to your estate.

If your situation has changed, there may be unintended consequences from your beneficiary designations.  For example, your account could be transferred to your ex-spouse or current spouse instead of your children.  Also, a later born child may not be named as a beneficiary.  Additionally, there can be negative tax consequences if your account goes to your estate instead of your spouse or other beneficiaries.

Please Note – This applies to these retirement accounts: Traditional, Roth, SEP, SIMPLE, Individual(k), and 403(b)(7).

Please see Fenimore disclosure.