Retirement Accounts as Part of Your Estate Planning

By Lane V. Erickson, Idaho Estate Planning Attorney

When it comes to estate planning there are more things to think about than just your actual estate planning documents. Having at least a basic estate plan is important. This would include a written last will and testament, which gives you the ability to dispose of your money, property, and other assets to your family members and loved ones after you die. It also includes a durable power of attorney for property and finances so that someone can help you take care of these things while you are alive if you can no longer do it for yourself.

Additionally, a basic estate plan would include a living will where you get to leave specific instructions to your doctors and other healthcare providers about what they should and should do if you are in a circumstance where you are on life support due to a terminal illness or injury. Finally, you should also have a health care power of attorney so that others can help you make decisions if you are not in a terminal condition.

In addition to these documents, you should also consider the importance of finalizing your non estate planning documents, which would include your retirement accounts. The focus of this article is to provide you with some instructions of the things that you should consider and do with your retirement accounts as part of your basic estate plan. Keep in mind that this article is just a summary. If you have questions or concerns, we encourage you to download our free Estate Planning Questionnaire or to schedule a free 30-minute consultation where we can answer your questions and help you have a better understanding of the importance of your estate plan.

When it comes to your retirement accounts the first thing that you should do is make sure that you have named beneficiaries. Your retirement accounts are being handled by an account administrator. This financial company is required to openly communicate with you about your account whenever you want. Part of this communication includes your ability to review and change any of the documents associated with your account.

One of the most important documents associated with your retirement account is what's known as the beneficiary designation form. This document gives you the ability to list the names of the individual or individuals who will receive your retirement account if you were to die at a time when there was money still left in the account. This form usually allows you to name a primary beneficiary which would be the person who would receive the account if you pass away. You also have the ability of naming contingent beneficiaries if the first person you list doesn't survive you.

If you do have retirement accounts, the second most important thing you can do is keep good records of your accounts. This would include either paper records such as account statements or other documents. It could also include electronic information such as the link to the account, your username and your password so your loved ones and other family members can access your account information.

If you have no records of the existence of your account, it's possible that your loved ones would never know that you had a retirement account. If this were to happen then it's possible that your money would never be delivered to whoever you've designated as the beneficiary.

Communicating with your beneficiaries is also very important. If you do not give copies of your account documents to these individuals while you are alive, you can still help them by at least communicating with the beneficiaries about the existence of the account. In doing this, your beneficiaries will have an idea of where to start looking for your account information or who to talk to.

Also, by communicating, you can share with your beneficiaries and loved ones where your account information is located. Alternatively, you can share with them the persons who they should contact to learn more about their accounts and what should be done after your passing.

Finally, because life does not stand still, any time you go through a major life event, you should review the individuals you have named as the beneficiaries of your retirement accounts and make sure that this still works. For example, if you named your spouse as your only beneficiary under your retirement accounts, and your spouse were to pass away before you, which is a major life change, you should now update your beneficiaries on your retirement account listings.

We have helped thousands of clients through the process of creating an estate plan. We have also assisted clients when a loved one has passed away. We are confident that we can help you create your own customized plan and help you in the event of the death of a loved one. Please contact us today for a free consultation.

Our team of Idaho lawyers can help you with any of your estate planning or probate needs. 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 free 30-minute consultation. Call us toll free at 877-232-6101 or 208-232-6101 for a free consultation. You can also email us directly at lane@racineolson.com or stop by our office at 201 East Center Street, Pocatello, Idaho 83201. We will answer your questions and help you solve your Idaho Estate Planning problems.