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December 26, 2017 – 12:52 pm | No Comment

This Week 7’s (12.14 – 12.31) Affirmation: Mindfulness – I will reach for mindfulness each day.
Date – 12.26.17
B-Book 44: Do the Work by Steven Pressfield
The key message in this book: Often we stop dead in our tracks …

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Home » Money Matters

Retirement beneficiaries: Extremely Important

Submitted by on December 27, 2005 – 9:31 pm No Comment
Making sure you have beneficiaries on your IRAs and other retirement accounts is essential to estate planning. The decision is important for 2 reasons: Beneficiary designations on retirement plans generally supersede any other instructions, even those in your will, and, under Vanguard’s current IRA agreement, failure to name any beneficiaries on your Vanguard IRA? means your assets may pass by default to your estate, which could result in higher taxes for your heirs.

You should designate 2 types of beneficiaries. Your primary beneficiary (such as an individual or individuals, trust, or charity) is first in line to receive the assets in your retirement account upon your death. Your secondary beneficiary receives the assets if there are no surviving primary beneficiaries when you die.

Vanguard offers 6 standard beneficiary options. You may select one option or mix options in percentages totaling 100%.

  • To my spouse who survives me. Your retirement assets go to the person you’re married to upon your death.
  • To my descendants who survive me, per stirpes. Your surviving children (including legally adopted children but not stepchildren) share your retirement assets equally. Using this designation can protect against unintentionally disinheriting future offspring.
  • Equally to my grandchildren who survive me. Your surviving grandchildren share your retirement assets equally. (This does not include stepchildren of your offspring.)
  • To the trustee of an existing trust. Your retirement assets go to a trust created during your lifetime.
  • To the trustee of a trust created under my last will. Your retirement assets go to a trust created after your death according to your will.
  • Other. Your retirement assets go to individuals or charities you specifically name?but be careful. Should you divorce, remarry, or have other children and forget to change your beneficiaries, the individuals identified by name will inherit your assets?and they may no longer be your intended heirs.

To be sure your beneficiary designations are in line with your overall estate plan, it’s wise to review them whenever you experience a major life event, such as a marriage, birth of a child, or divorce. We also recommend that you consult a tax or financial advisor about your individual situation.

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