By Peter Sweetser, Retirement Plans Specialist
We recommend that you review, and update as necessary, both your primary and contingent FAM IRA beneficiaries annually. As the IRA distribution process occurs upon your death, if the primary beneficiary is alive, your account will go to them. If your primary beneficiary predeceases you, the IRA 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 IRA could be paid to your ex-spouse or current spouse instead of your children. Also, a later born child may not be named as a beneficiary. It is important to note that there can be negative tax consequences if your IRA goes to your estate instead of your spouse or other beneficiaries. Please remember how vital it is to update your beneficiaries.