Estate Planning And Your Retirement Accounts

For many people, retirement accounts, including 401(k) plans and individual retirement accounts (IRAs), are their most significant assets

. While you may think youll need every bit of money in those accounts for your retirement, what would happen if you die at an early age? You should include these accounts in your estate plan so heirs inherit them with minimal estate- and income-tax effects. Some

strategies to consider include:

review your beneFiciary designations. These assets are distributed based on beneficiary designations, not your will or other estate-planning documents. Thus, you should name primary as well as contingent beneficiaries. Make sure you understand how your assets will be distributed if a primary beneficiary dies before you do. For instance, if your primary beneficiaries are your children and one child dies before you, do you want that childs share to go to your remaining children or to that childs children? Review your beneficiary designations after major life changes, such as marriage, divorce, or a childs birth.

consider rolling your 401(k) plan assets over to an ira. now that 401(k) plans must allow nonspouse beneficiaries to withdraw funds over their life expectancy, there is not as much need to roll 401(k) plan assets over to an IRA. However, with IRAs, you will often have many more investment options for your plan assets. Also, you may want to roll the plan assets over to a Roth IRA.

split an ira when there are Multiple beneFiciaries. When there is more than one nonspouse beneficiary for an inherited IRA, distributions must be taken over the oldest beneficiarys life expectancy. By splitting the IRA into separate accounts, each beneficiary can take distributions over his/her life expectancy. You can split the account while you are alive, or your beneficiary can do so within nine months after your death. Separating the account is especially important when one of the beneficiaries is not an individual or qualifying trust, such as a charitable organization.

If you die before required distributions begin at age 70 1/2, the entire balance must be paid out in five years. If you die after required distributions begin, the balance must be paid out over your remaining life expectancy. When the account is split, the individual beneficiary can take distributions over his/her life expectancy.

by: Ishan Goradiya

POST COMMENT

Dont Forget About Inflation Crestor – Buying Cholesterol Lowering Medicine Outdoor Furniture - Embrace the Year with the Newest and Coolest Furniture Structure Benefits of Training at Home Pamper Yourself With A Homemade Facial Choosing your Kid's Bedroom Furniture Modern Dining Furniture Adds Excitement To Your Home Modern Furniture Stores: How To Find The Best One Highland Utah homes Elderly Homecare Service: Helping You Live Independently Fresh Glowing Skin From Home Buenos Aires Real Estate Tips For Creating A Lavish Home