The IRA beneficiary form, or more frankly, the lack of one. Far too often this beneficiary form is done as an afterthought. This may have big consequences.
- It will determine whether your family will be able to stretch the IRA over their lifetime, substantially reducing taxation.
- It will determine who receives the IRA funds, and whether the distribution is per capita or per stirpes.
- It will determine whether or not there is a bloodline distribution.
All too often, I meet with families to determine who will be on the beneficiary form, only to hear “the bank has it.”
This is a NO-NO and has caused many families an unnecessary amount of pain.