Retirement Accounts and Pocatello Estate Planning

When our Pocatello estate planning team assist you with your estate plan we take into consideration more than just the money, property and assets that you own. We also specifically review all the circumstances of your life. We also consider your family and loved ones. Our goal is to accomplish your intent both for yourself and for your loved ones. A specific asset that is often overlooked when it comes to Pocatello estate planning is retirement accounts. We realize that many people believe that the instructions left in a last will and testament will control the distribution of everything they own, including any retirement accounts they have. However, this isn’t true. To help our clients we work specifically with our clients and help them understand and handle their retirement accounts as an important part of their Pocatello estate plan.

Our skilled Pocatello team of estate planning attorneys includes partners Randy Budge and Lane Erickson and attorneys Nate Palmer and Dave Bagley. We take pride in our team because they each have years of experience and the specific ability to help clients create a customized estate plan that fit their own personal and specific needs. We have represented our clients for more than 70 years. During this time the attorneys on our team have each earned the highest rankings possible from prominent legal rating services including AVVO, Justia, and Martindale & Hubbell. We are proud of these rankings because they are based on reviews made by real clients, opposing attorneys and the judges we appear before.

Retirement accounts are a unique asset that must be handled correctly to be included as part of your estate planning. To help you understand their significance, here are three specific things that you should know.

The first thing that you should know and understand about your retirement accounts is that they are not controlled by your last will and testament. To be specific, the instructions you leave in your last will and testament about who should receive the monies in your retirement accounts will not control if you have already listed beneficiaries. For example, if you specifically say in your last will and testament that you leave your retirement accounts to your wife, your last will and testament will likely have no say on whether your wife actually gets your retirement accounts or not. The specific reason for this is because your retirement accounts are controlled by the contract that created the account.

When you opened your retirement accounts you were required to sign a contract document with the group or administrator that would hold and administer that account for you. The contract that you signed specifically stated that the administrator you were working with would handle that account based upon the applicable federal laws that control retirement accounts. More importantly, you likely made some specific choices already as a part of the contract that you signed about who your beneficiary (or beneficiaries) would be.

Specifically, the beneficiary form you filled out gave you the opportunity to name the people that you wanted to have your account monies when you passed away. This Beneficiary Designation form allows you to name a first choice or primary beneficiary(ies). Next, the form allows you to name your secondary beneficiary(ies). The most important thing for you to understand is that it is only if you leave the beneficiary designation form blank that your retirement account monies become a part of your estate when you die which. So, if you leave the form blank, then your last will and testament will control who your retirement account monies go to. If you did fill it out, then the Beneficiary Designation form is a part of your contract and it controls who will receive your account monies.

The next thing for you to know is that because the Beneficiary Designation form controls who, you should keep your choices on that form updated regularly. The easiest illustration to give as an example of why this is important is a divorce. Suppose for a moment that you filled out your Beneficiary Designation form while you were happily married. This means you likely named your spouse as your primary beneficiary. Now suppose that a decade later your spouse divorces you. Let’s also suppose that a few years later you marry your second spouse. However, if after the divorce you have not changed the Beneficiary Designation forms on your retirement accounts, your ex-spouse, and not your current spouse, will still be listed as the primary beneficiary. If you die, no matter how much you disliked your ex, or how much you love your current spouse, your ex-spouse would have a legal right to make a claim for all or a portion of your retirement account monies. To avoid having your ex-spouse receive these monies, your current spouse and family will likely have to commence a law suit.

The above example shows how easy it can be for your retirement accounts to go to people you do not want. Based on this, we always encourage our clients to review their beneficiary designation forms whenever they go through any major life change. This allows them to make sure they have named on their retirement accounts the people they really want to get the money.

Major life include the birth of an person, a person’s death, a divorce, a marriage, and the passage of several years. When any of these events occurs, your estate planning, including the beneficiary forms on your retirement account contracts, should be reviewed. Really, it would be wise to look at every Beneficiary Designation form regularly just to make sure that you have the people listed that you really want.

Finally, it is very important that you keep all of your records and instructions up to date and specific. Imagine that your family can’t find any instructions about what they should do. This happens all the time. Many families cannot find any information about insurance, or bank accounts, or retirement accounts. When this happens, even if the accounts exist, it is possible that the family may never receive the money that you have saved. To avoid this, we always recommend to each client that they create and keep an organized file or record of all of their accounts including retirement accounts. This doesn’t need to be fancy. Just a simple way of listing and organizing the information is what is needed. This could be a simple binder, or a filing cabinet or even a shoe box so long as provides your family with the basic information. Keeping updated statements will do the trick.

Our team of Pocatello lawyers can help you with any of your estate planning needs including your retirement accounts. Whether you are seeking to create or review an estate plan for yourself or would like to help a loved one, we are available to discuss your options and answer your questions at an initial consultation. Call us toll free at 877.232.6101 or 208.232.6101 for a consultation. You can also email us directly at racine@racinelaw.net. We will answer your questions and help you solve your Pocatello Estate Planning problems.