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GOT RETIREMENT ACCOUNTS? LET’S MAKE THEM PART OF YOUR ESTATE PLAN

By Lane V. Erickson, Idaho Estate Planning Attorney

I love being an estate planning attorney because I find that I can help individuals make a plan for every possible aspect of their lives. In fact, sometimes when people ask me what I do for a living, I tell them that I provide sleep insurance. When I say this, most people look at me funny. This gives me an opportunity to clarify that I am actually an estate planning attorney and that because of the work I do people are able to sleep well at night knowing that they and their family are protected through a well-thought-out plan.

A basic estate plan would include a last will and testament, providing a person with the ability to decide who they want to give their money, property, and other assets to after they have died. It also includes a durable power of attorney and a power of attorney for healthcare. These documents give a person the ability to protect themselves while they are alive and make sure that they will be cared for and that their estate will be protected and used for their benefit. Additionally, we provide a living will which gives an individual the ability to make end-of-life decisions and provide specific instructions to their healthcare providers. Depending on a person’s circumstances we may also provide one or more trusts as part of their estate plan.

While this covers the basics, there is usually a little more that needs to be done. Specifically, many people that we help also have life insurance, annuities, retirement accounts, bank accounts, and sometimes investment or brokerage accounts. Each of these types of things also needs to be included in your estate plan. The way this is done is through a document called a beneficiary designation form.

Every one of the items that are listed here is a contract that our clients have with a third party such as an insurance company or a brokerage firm. Because it is a contract, none of these items are controlled by a person’s last will and testament even though they are classified as an asset that person owns. Because the contract controls these assets, it’s important that we follow the requirements the contract has for how these items can be distributed to family members or loved ones after our clients pass away.

The beneficiary designation form gives our client the ability to list exactly who they want the money or property that’s held in these accounts to be distributed after they pass away. Typically, for a married couple, each spouse will list their spouse as their primary beneficiary. This means that if they were to die their spouse would be entitled to collect 100% of the account or life insurance benefits. Additionally, we usually encourage our clients to name a contingent or secondary beneficiary in case the first beneficiary they list dies before they do. Again, typically, our clients will list their children or other family members or loved ones.

We then instruct our clients so that they understand that they can name one or more people in each category at the same time. In other words, they could split the entire account or benefit between two or more beneficiaries in whatever percentage they would like.

The key is that our clients take care of this on their own. Are estate planning, which includes the basic documents listed above, usually does not include filling out the beneficiary designation forms unless our clients need help in doing so. Usually, the forms are very straightforward, and our clients have no trouble completing them.

Once the beneficiary designation forms are completed, they are given back to the contracting company that is administering the benefits or accounts. By doing this the contracting company is contractually bound to deliver the benefits or accounts to whoever you’ve designated after you pass away. However, it’s important to understand that even though the beneficiary designation form is a binding part of the contract, you have the ability to change it whenever you want, as often as you want, and it anyway that you want.

If you have questions about how you can make your retirement accounts part of your estate planning, we can help. We have assisted thousands of clients in completing a well-thought-out estate plan including dealing with their retirement accounts. We are confident that we can help you too. Please contact us today for a free 30-minute consultation where we can discuss your questions and help you complete your own customized estate plan.

ENLIST AN IDAHO ESTATE PLANNING ATTORNEY TO HELP YOU

If you have any questions about your estate or how to simplify your plans for your family and loved ones, we can help.  Call us toll free at 877-232-6101 or 208-232-6101 for a free consultation with Lane Erickson and the Racine Olson team of Estate Planning attorneys in Pocatello. You can also email Lane Erickson directly at lane@racineolson.com. We will answer your questions and will help you solve your Pocatello Estate Planning problems. I have helped numerous clients create their own customized estate plans and I’m confident that I can help you too.

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