Retirement Plans and Estate Planning

By Lane V. Erickson, Attorney

During a normal estate planning interview with client I often find myself talking about retirement plans. My clients are always interested in knowing how their retirement plans will be dispersed when they pass away. It is helpful to bring these things up and to discuss them in the context of preparing a thorough Idaho Estate Plan so that clients have a good understanding of what is, and what is not, part of their estate planning. Here are three tips to think about when it comes to including your Retirement Plans with your Idaho Estate Planning.


The first step is to have a clear understanding of what is and what is not included as part of your estate planning. Normally, retirement plans are individually owned. Retirement accounts or plans come with names such as “IRA”, which is an abbreviations for “Individual Retirement Account,” or 401K . These are the types of retirement plans that most people have. The most important thing for you to understand is that these accounts are owned individually. This is true even if a person lives in a community property state.

Because retirement accounts are individually owned, they are property that can be given by that individual to whomever they choose. However, it is important to note that retirement accounts are essentially third-party contracts. This means that they are administered by a company through a contract that you sign when you open the account. As a result, your retirement accounts are controlled by the contact and not by your Last Will and Testament or any other estate planning document.

One part of the contract that you signed when you opened your retirement account is a beneficiary form. This the form you use to name the specific individuals who will receive your retirement account if you were to pass away. Because these items are controlled by contract, they are not included as part of nor are they controlled by, your estate plan.


Even though a retirement plan is not part of your estate or your estate planning, you still have control over who a retirement account is distributed to. As was mentioned above, you have the ability to fill out a beneficiary form naming the individual or individuals who will receive your retirement account upon your death.

The most important thing for you to understand is that you are in complete control of who your retirement account is distributed to. At any time you can go to your retirement account administrator and request that your beneficiary form be changed. You can change your beneficiary form as many times as you would like, as often as you’d like.


The third tip about retirement plans that you should know, is that because you are in complete control, you should check the beneficiary forms often. I am always amazed by my clients who come in to talk with me about their Estate Planning and who after discussing retirement accounts with them come to find that they have no idea whether they filled out a beneficiary form or not. I always instruct my clients to go that day and talk with their retirement account administrator to determine who they have listed as beneficiaries. At follow-up meetings my clients often tell me that the form was never filled out, or that it was filled out many years ago and they had no recollection of putting the names on the beneficiary form that are listed.

Just like life, things are going to change when it comes to your retirement accounts. It is important for you to review the beneficiary forms regularly to make sure that the individuals that you want to receive your retirement accounts when you pass away will actually receive them. If you go through a divorce, or a marriage, or someone close to you passes away, this may change how you fill out those forms. For this reason, I tell my clients that if they have gone through any major life change, it is a good idea for them to review their estate plan thoroughly, including their Retirement Accounts, and make sure that it all does what they want.

If you have questions about your Idaho Estate plan, or whether your retirement accounts are setup correctly, we can help. Call us toll free at 877-232-6101 or 208-232-6101 for a consultation with Lane Erickson and the Racine Olson team of Estate Planning attorneys in Idaho. You can also email Lane Erickson directly at We will answer your Idaho Estate Planning questions and will help you solve your Idaho Estate Planning problems.

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