Estate Planning for Retirement Benefits
What special considerations need to be given for estate planning relating to my retirement accounts?
Traditional IRAs, 401k, 403b, and other retirement accounts contain pre-taxed dollars (dollars that have yet to be subject to income tax). All withdrawals are subject to income tax. There can be a great advantage of further deferring taxable events after you die. As a result, special considerations need to be given to naming the beneficiaries on those accounts. The considerations differ if you are married, if you have minor children, based on the number of children you have, based on the value of your assets outside of your retirement accounts, whether your children will have immediate needs, and other factors.
Circumstances may exist such that it would be advisable to delay the final distribution of those accounts for up to 10 years after your death or until your minor children are adults. There are times when the best course of action is to name your trust or estate as the beneficiary of your retirement accounts and other times that your children should be named. I will carefully review your assets, retirement accounts, family situation, and desires and recommend how your beneficiaries should be to best meet your circumstances and desires.