Where is your beneficiary designation form?

Your beneficiary designation forum is the document that controls your IRA, 401 (K), and other retirement plans.

You need to keep a copy of it for each and every IRA and if you can’t find it, you might be facing probate.

IRAs should not be payable to your trust unless you want a “blow out” rather than a “stretch out” and force your beneficiaries to pay income taxes sooner rather than later.

The primary beneficiary of your IRA and other retirement accounts should be first to your spouse and then to your kids. Your trust should not be the beneficiary of any retirement account. You need to get a signed copy of your beneficiary designation form and keep it with your other estate planning documents.

Put the Beneficiary Designation Form in the three-ring binder that you receive from your attorney with the trust and your will. Betty’s husband Bill died, and she arrived at my office to do a trust administration meeting and I needed a list of all her assets. She told me Bill’s beneficiary designation for him named Washington Mutual as custodian. Betty soon learned that Washington mutual had closed and they had sent their Beneficiary Designation Forms to Chase Bank. Chase Bank lost Bill’s Beneficiary Designation Form. Betty was required to go to court to get Bill’s IRA transferred to herself to claim a rollover. She had to spend over $50,000 and lose a year in court before she get that IRA to rollover to her name because the Beneficiary Designation Forum was lost.

The lesson learned here from Betty’s experience is always confirm with your IRA custodian that they received your Beneficiary Designation Form and make a copy for your own records. Ask your custodians to send you a stamped copy that they both received and approved your Beneficiary Designation Form.

Bailey Smith is the “trust doctor”. He fixes trusts, creates trusts, and helps clients administer their trust. He never acts as a trustee, but he helps the trustee through the trust administration process.

Call the Trust Dr, W. Bailey Smith, who has created over 7,000 trusts and handled over 1,000 trust administrations at (949) 833-8891. Email him at BSmith@YourTrustDr.com.