{"id":2218,"date":"2013-02-06T12:45:58","date_gmt":"2013-02-06T17:45:58","guid":{"rendered":"http:\/\/www.billlosey.com\/?p=2218"},"modified":"2013-02-06T12:45:58","modified_gmt":"2013-02-06T17:45:58","slug":"10-things-you-your-beneficiaries-need-to-know","status":"publish","type":"post","link":"https:\/\/billlosey.com\/knowledge-center\/10-things-you-your-beneficiaries-need-to-know\/","title":{"rendered":"10 Things You &#038; Your Beneficiaries Need To Know"},"content":{"rendered":"<p>If your loved ones have invested, saved or insured themselves to any  degree, you may be named as a beneficiary to one or more of their  accounts, policies or assets in the event of their deaths. While we all  hope \u201cthat day\u201d never comes, we do need to know what to do financially  if and when it does.<\/p>\n<p><strong>Legally, just who is a beneficiary?<\/strong> IRAs, annuities, life insurance  policies and qualified retirement plans such as 401(k)s and 403(b)s are  set up so that the accounts, policies or assets are payable or  transferrable on the death of the owner to a beneficiary, usually an  individual named on a contractual document that is filled out when the  account or policy is first created.<\/p>\n<p>In addition to the primary beneficiary, the account or policy owner  is asked to name a contingent (secondary) beneficiary. The contingent  beneficiary will receive the asset if the primary beneficiary is  deceased.<\/p>\n<p>Some retirement accounts and policies may have multiple  beneficiaries. Charities are also occasionally named as beneficiaries.  If you have individually listed one (or more) of your kids or grandkids  as designated beneficiaries of your 401(k) or IRA, that designation will  usually override any charitable bequest you have stated in a trust or  will.<\/p>\n<p><strong>A will is NOT a beneficiary form. <\/strong>When it comes to 401(k)s and IRAs,  beneficiary designations are commonly considered first and wills  second. Be mindful of who you select. If you willed your IRA assets to  your son in 2008 but named the man who is now your ex-husband as the  beneficiary of your IRA back in 1996, those IRA assets are set up to  transfer to your ex-husband in the event of your death.<\/p>\n<p><strong>If a retirement account owner passes away, what steps need to be taken?<\/strong> First, the beneficiary form must be found, either with the IRA or  retirement plan custodian (the financial firm overseeing the account)  or within the financial records of the person deceased. Beyond that, the  financial institution holding the IRA or retirement plan assets should  also ask you to supply:<\/p>\n<ul>\n<li>A certified copy of the account owner&#8217;s death certificate<\/li>\n<li>A notarized affidavit of domicile (a document certifying his or her place of residence at the time of death)<\/li>\n<\/ul>\n<p>If the named beneficiary is a minor, a birth certificate for that  person will be requested. If the beneficiary is a trust, the custodian  will want to see a W-9 form and a copy of the trust agreement.<\/p>\n<p>If you are named as the primary beneficiary, you usually have three  options for claiming the assets, regardless of what kind of retirement  savings account you have inherited:<\/p>\n<ol>\n<li>Open an inherited IRA and transfer or roll over the funds into it.<\/li>\n<li>Roll over or transfer the assets to your own, existing IRA.<\/li>\n<li>Withdraw the assets as a lump sum (liquidate the account, get a check).<\/li>\n<\/ol>\n<p>Before you make ANY choice, you should welcome the input of a tax  advisor, and discuss any limitations or consequences that may apply to  your situation.<\/p>\n<p><strong>What if you are a spousal beneficiary? <\/strong>If that is the case, you may elect to:<\/p>\n<ul>\n<li>Roll over or transfer assets from a traditional IRA, Roth IRA,  SEP-IRA or SIMPLE IRA into your own traditional or Roth IRA, or an  inherited traditional or Roth IRA<\/li>\n<li>Withdraw the assets as a lump sum<\/li>\n<li>Roll over or transfer qualified retirement plan assets from a  401(k), 403(b), etc. into your own retirement account, or take them as a  lump sum.<\/li>\n<\/ul>\n<p><strong>What if you are a non-spousal beneficiary?<\/strong> If this is so, you may elect to:<\/p>\n<ul>\n<li>Roll over or transfer assets from a traditional IRA, Roth IRA,  SEP-IRA, SIMPLE IRA or qualified retirement plan into an inherited IRA<\/li>\n<li>Withdraw the assets as a lump sum.<\/li>\n<\/ul>\n<p><strong>What if a qualified (i.e., irrevocable) trust is named as the  beneficiary?<\/strong> If that is the circumstance, the trustee has two choices:<\/p>\n<ul>\n<li>Transfer assets from a traditional IRA, Roth IRA, SEP-IRA, SIMPLE IRA or qualified retirement plan into an inherited IRA<\/li>\n<li>Withdraw the assets as a lump sum.<\/li>\n<\/ul>\n<p><strong>The next calendar year will be very important.<\/strong> Inheritors of  retirement accounts have until September 30 of the year following the  original account owner\u2019s death to review and remove beneficiaries, and  until December 31 of that year to divide the IRA assets among multiple  beneficiaries. Usually, December 31 of the year after the original  retirement plan owner\u2019s passing is the deadline for the first RMD  (Required Minimum Distribution) from an inherited traditional or Roth  IRA.<\/p>\n<p><strong>Now, how about U.S. Savings Bonds?<\/strong> If you are named as the primary beneficiary of a U.S. Treasury Bond, you have three options:<\/p>\n<ul>\n<li>Redeem it at a financial institution (you will need your personal I.D. for this)<\/li>\n<li>Get the security reissued in your name or the names of multiple  beneficiaries. You do this via Treasury Department Form 4000, which you  must sign before a certifying officer at a bank (not a notary). Then you  send that signed form and a certified copy of the death certificate to a  Savings Bond Processing Site.<\/li>\n<li>Do nothing at all, as the primary beneficiary automatically becomes the bond owner when the original bond owner passes away.<\/li>\n<\/ul>\n<p><strong>What about savings &amp; checking accounts?<\/strong> Bank accounts are often  payable-on-death (POD) assets or \u201cTotten trusts.\u201d All a beneficiary  needs to claim the assets is his or her personal identification and a  certified copy of the death certificate of the original account holder.  There is no need for probate. (Some states limit charities and  non-profits from being POD beneficiaries of bank accounts.)<\/p>\n<p><strong>How about real estate?<\/strong> Lastly, it is worth noting that about a dozen  states use transfer-on-death (TOD) deeds for real property. If you live  in such a state, you have to go to the county recorder or registrar,  usually with a certified copy of the death certificate and a notarized  affidavit which informs the recorder or registrar that ownership of the  property has changed. If the deed names multiple beneficiaries and some  are dead, the surviving beneficiaries must present the recorder or  registrar with certified copies of the death certificates of the  deceased beneficiaries.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If your loved ones have invested, saved or insured themselves to any degree, you may be named as a beneficiary to one or more of their accounts, policies or assets in the event of their deaths. While we all hope [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[],"class_list":["post-2218","post","type-post","status-publish","format-standard","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/2218","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/comments?post=2218"}],"version-history":[{"count":0,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/2218\/revisions"}],"wp:attachment":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/media?parent=2218"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/categories?post=2218"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/tags?post=2218"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}