Experts in trust and estate law explain typical IRA beneficiary scenarios and why it’s critical to review EVERY time you set up or rollover your IRA to avoid probate. #ira #retirement #retirementplanning #beneficiaries #actec #actecfellow

The American College of Trust and Estate Counsel, ACTEC, is a national association of approximately 2,400 peer-elected lawyers and law professors from across the United States and abroad with expertise in estate planning, probate and trust administration.

In this video:
00:00 Open
00:13 What happens if you do not have an IRA beneficiary designated?
01:20 Do you need to redo your beneficiaries when you roll over an IRA?
01:42 IRAs and surviving spouse as the beneficiary.
02:38 IRA with a young surviving spouse who does not want to defer.
03:41 How does an inherited IRA work?
04:55 Minor children of an inherited IRA.
06:39 Advice on preparing the IRA beneficiary designation form….(read more)

LEARN MORE ABOUT: IRA Accounts

TRANSFER IRA TO GOLD: Gold IRA Account

TRANSFER IRA TO SILVER: Silver IRA Account

REVEALED: Best Gold Backed IRA

An Individual retirement account (IRA) is a popular vehicle for tax-advantaged retirement savings. It offers an opportunity for the account holder to save for the future while enjoying some tax benefits. In addition to building wealth, an IRA provides a way to pass on assets to beneficiaries upon the account holder’s passing. But, what happens if you die without designating a beneficiary?

Common IRA Beneficiary Scenarios:

1. Spouse as a beneficiary: A surviving spouse has the option of rolling over the IRA assets into their name. This allows the spouse to continue to enjoy tax-deferred growth and avoid early distribution penalties. IRA assets inherited by a surviving spouse do not need to be distributed until the spouse reaches age 70.

2. Non-spouse individual as a beneficiary: The beneficiary is required to take distributions based on their lifespan starting the year following the account holder’s death. These distributions are subject to income tax but will not have an early withdrawal penalty if the beneficiary is older than 59.5 years.

3. A minor child as a beneficiary: If a minor child is named as the primary beneficiary, the retirement account will need to be held in a trust or a custodial account until the child reaches the age of majority. The required minimum distributions will be calculated based on the child’s life expectancy but will start after the child becomes 18 years old.

4. Estate as the beneficiary: If the account holder failed to name a beneficiary, the IRA assets will become part of their estate. This means that the assets will not bypass probate, and the estate will be subject to probate fees, taxes, and other administrative costs.

It is advisable to update IRA beneficiaries regularly to reflect any life changes such as marriage, divorce, a new child, or the passing of a beneficiary. Proper planning can help ensure that the account holder’s heirs receive their intended inheritance in a tax-efficient manner.

In conclusion, it is essential to understand the different IRA beneficiary scenarios and their tax implications. Proper estate planning can help ensure that the IRA assets are distributed according to the account holder’s wishes and that their beneficiaries receive their intended inheritance with minimal taxes and administrative costs. Consulting with an experienced estate planning attorney can help navigate the complexities of IRA beneficiary planning.