Posted by: Woodfork Law | April 30, 2013

Retirement Accounts

Throughout your working career you may have contributed to a retirement account such as a IRA, Roth IRA, 401k, Keogh, etc.  When you pass, these accounts will not go into probate as a part of your estate because they have beneficiary designations. When you opened your retirement account, you designated a beneficiary on the forms themselves.  You do not have to list your retirement accounts in a Will or Trust.

Normally, you should name your spouse as your beneficiary.  In fact, some states will allow a spouse to claim a part of the retirement account if they are left out.  The advantage of leaving the account to your spouse is that your account may be rolled over into your spouse’s retirement account without being taxed and/or penalized as a withdrawal.  The disadvantage is that the account will be included in your spouse’s estate when they pass.

However, note that it is important to have an alternative beneficiary in the event your spouse passes before you.  If you do not have an alternative beneficiary, the value of the retirement account will be included in your estate – with possible tax consequences.

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