![]() If this happens, your heirs could be required to take distributions, which they would then be taxed on. Consider your retirement account: if you haven’t named a beneficiary, the account could get passed to your estate. However, for certain assets which can be transferred using a beneficiary designation, that designation will decide who receives that asset upon your death regardless of what is stated in your will.įailing to designate a beneficiary can be a costly mistake. Many people might think a will is the primary way for determining how someone’s assets are passed on. Upon your death, your assets transfer to the trust and distributions are made from the trust to its beneficiaries according to your wishes. You can name a trust as a direct beneficiary of an account. You’ll also want to consider whether you’d like to provide for outright distributions to the beneficiaries or, for larger inheritances, leave funds in a trust to provide for access to the assets over time.Ī trust can give you more control over how your assets are distributed. Once you have a comprehensive list of your assets, do you know where you want them to go upon your death? The answer might be to your spouse, your children or grandchildren, your go-to charities or a combination of the above. Real estate, including your home and any investment properties.Life insurance policies (including those provided by your employer).IRAs, including traditional, Roth, SIMPLE and SEP.401(k), 403(b) and other retirement accounts.Here are 7 common mistakes to avoid when selecting beneficiary designations.īefore you start determining what and how much you want to go to your beneficiaries, you’ll need a list of all the assets that make up your estate. And since it’s your responsibility to name your beneficiaries, doing it incorrectly (or not at all) can be costly. Doing so outlines how and to whom you want your assets distributed upon your death. These common mistakes can complicate things for your beneficiaries or your estate.ĭesignating beneficiaries for your retirement and other financial accounts is important. Find a financial advisor or wealth specialist.
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