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Estate Planning and Retirement Accounts

Our Idaho Estate Planning Attorneys find that it is very common during a normal estate planning interview with a person or a couple to talk retirement accounts. Most clients are interested to learn how their retirement accounts will be dispersed after they pass away. It is helpful to bring these things up and to discuss them in the context of preparing a thorough Estate Plan in Idaho so that each person has a good understanding of what is, and what is not, part of their estate planning.

Our Estate Planning Lawyers in Idaho use the experience they have obtained over decades to customize each client’s estate planning, and to advise our clients, especially when it comes to handling their retirement accounts. Our partners Randy Budge and Lane Erickson, and attorneys Nathan Palmer and Dave Bagley create our award winning Idaho Estate Planning team of Attorneys who can help you. Below is a list of three specific things each person with retirement accounts should understand and consider when it comes to working with retirement accounts as a part of your Estate Plan in Idaho.

Understand What Is Not Included in Your Estate Planning

The first step is to have a clear understanding of what is and what is not included as part of a person’s estate planning. Normally, retirement plans are individually owned. Retirement accounts or plans come with names such as “IRA”, which is an abbreviation for “Individual Retirement Account”, or 401K, 403(b) or a pension of some sort. These are the types of retirement plans that most people have. The most important thing 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 a person signed when they opened the account. As a result, each person’s retirement accounts or pension plan are controlled by the contact and not by that person’s 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 form is used to name the specific individuals who will receive your retirement account when you pass away. Because these items are controlled by contract, they are not included as part of nor are they controlled by, your estate plan.

Pension plans are also unique. Like other retirement accounts, pension plans are individually owned. However, unlike most other retirement accounts, pension plans are usually not transferrable upon the death of the recipient. In other words, it is common for most pension plans to end with the death of the recipient.

Know the Options for Dealing with Retirement Accounts

The next most important thing to know and understand is that even though a retirement account is not part of a person’s estate or their estate planning, that person still has control over who their retirement account is distributed to. As mentioned above, a person owning a retirement account has the ability to fill out a beneficiary form naming the individual or individuals who will receive their retirement account upon their death.

The most important thing for a person who owns a retirement account to understand is that they are in complete control of who their retirement account is distributed to. At any time the owner of a retirement account can go to their retirement account administrator and request that their beneficiary form be changed. The owner of a retirement account can change their beneficiary form whenever they want and as often as they’d like. This gives them the ability to decide at any given moment who their retirement account will be given to when they die.

Reviewing Your Retirement Accounts Often

The third thing to understand about retirement accounts and estate planning is that because the owner of the retirement account is in complete control, they should check the beneficiary forms often. As Estate Planning Attorneys in Idaho we are often amazed by clients who come in to talk with us 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. We always instruct our clients to immediately talk with their retirement account administrator to determine who they listed as beneficiaries. At follow-up meetings our clients often tell us 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 a person’s retirement accounts. It is important for each person to review the beneficiary forms regularly to make sure that the individuals that they want to receive their retirement accounts when they pass away will actually receive them. This is especially true if a person has gone through a divorce, or a marriage, or when someone close to then has passed away. When any of these things happen or if any other major life change has occurred, it may change who a person lists as their beneficiary for their retirement accounts. For this reason, we advise our clients to regularly review their Idaho estate plan thoroughly, including their Retirement Accounts, and make sure that it does what they want.

Enlist an Idaho Estate Planning Attorney to Help You

If you own any type or kind of a retirement accounts or a pension, our Idaho Estate Planning attorneys can help you make sure that your wishes are carried out. We are available to discuss your options and answer your questions at an initial free consultation. Call us toll free at 877-232-6101 or 208-232-6101 for a free consultation with the Racine Olson team of Estate Planning attorneys in Idaho. You can also email us directly at racine@racinelaw.net. We will answer your Idaho Estate Planning questions and will help you solve your Idaho Estate Planning problems.

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