Don’t "Misplace" Beneficiaries

If you can’t recall all the beneficiaries you’ve named for life insurance, retirement accounts and other investments, it’s time to examine all those documents and possibly have a serious discussion with your financial adviser.  Not only is it important to know who you’ve named, you should also make sure that beneficiary designations are updated regularly so that they are consistent with your overall estate plan.

Joint tenancy — Assets held in joint tenancy automatically pass to the surviving joint tenant.  If you set up a joint bank account with a child simply to allow the child to make withdrawals on your behalf, it may not be your intention for the funds to go to that child at your death, to the exclusion of others.

Retirement plans — IRAs, 401(k)s and other retirement plans are, for many people, their largest assets.  If you’re married, federal law requires that your 401(k) plan (but not an IRA) automatically pass to your surviving spouse unless a spousal waiver has been signed.  If you list a beneficiary on your IRA custodian’s form and name a different beneficiary in your will or living trust, the custodian’s form prevails.

Minor beneficiaries — It may make sense to name a grandchild to receive tax-deferred assets, particularly retirement accounts, which can then be distributed over the younger person’s lifetime.  But you may want to do so in a way that controls the funds, at least until the child reaches age 21.  With some assets, a trust gives you the flexibility to direct how and when funds will be distributed.

Charity as a beneficiary — You can name charity as the beneficiary of many accounts, including IRAs, often with favorable tax results.  It’s even possible to split the benefits between family members and charity.


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Contact Information

Joe Woodward
Director of Institutional Advancement
(909) 482-5220


The materials contained on this website are intended only to show some ways by which you can make a charitable gift or bequest and thereby minimize federal tax liabilities, as authorized by the Internal Revenue Code. All examples are of a general nature only and should not be applied to your specific situation without first consulting your attorney or other advisers.