Not sure how this came up, it might be because of the ability to transfer your IRA to a Roth IRA this year, but I recently
Who to choose? How to choose?
started thinking about who my beneficiaries should be, and how you choose them. Everyone is used to just signing spouses, parents, kids, on insurance and retirement plans, but are there guidelines? Is there a smart way to approach this?
Understand that my list isn’t very long. My husband of course, but if we go together, then what? Since we don’t have children, that eliminates one obvious group. From there it gets dicier. When my niece and nephew were younger, they were listed so there would be money for their education. Now they are pretty much out on their own, and while some money for them would be a nice thing, is it the best use of the money? Do you give leave it to someone older that is needier? What about charities?
Turns out this is a much bigger issue, than just picking a couple of relatives, and signing your name. First of all, you need to decide if tax planning will be an issue (is it ever not?), or if you just want to give away the “stuff” and let your heirs deal with the tax implications. According to attorney Amie Gartenberg, “the tax tail wags the dog”, and with inheritance tax rules currently in flux…
The other thing I didn’t know, was that bequests in your IRA, 401K etc, supersede those in a will. What I also learned is that you should review all these documents periodically with your attorney. Just think about it like this, every time there’s a new president, you should probably make an appointment, as taxes seem to change with every administration. And people forget to update wills and other documents when they or their family members undergo major life changes, such as divorce, federal indictments, or a loosing poker hand.
So this year, spring cleaning for me will include dusting off my will and other documents, and making sure everything is up to date. What about you?
Don’t forget about this week’s Blogging Boomers Carnival. Where else can you find out whether spring clogs are for those of us over 40, and other great topics?
