IRA Beneficiary
39. 5-Step Action Plan
We've covered a lot of information in this presentation. If you're wondering where to begin, start with our five-step action plan.
1. Determine your objectives. Whom do you want to receive this money after you die? Is getting the maximum stretch out important to you?
2. Select a qualified professional to help. The laws are complicated, and there is often a lot of money at stake. Find someone with whom you will be comfortable sharing this information; someone who can answer your questions and help you decide which strategies are best for you.
3. Put your plan into action. Some employer-sponsored plans--like 401(k)s, pensions and profit sharing plans--have restrictions on beneficiary options. But, under a new rule, any beneficiary may now inherit employer plan assets and roll them into an IRA in the name of the decedent, continuing the tax-deferred growth over the beneficiary's own life expectancy. Certain restrictions, of course, will apply. If your plan will not let you do what you want, rolling your money into an IRA will usually give you more options. If your money is already in an IRA and the institution will not let you do what you want, move your IRA to one that will. You may also want to split a large IRA into smaller ones.
4. Educate your beneficiaries. If they are late in taking the first required distribution after you die, or if they change the account name from yours to theirs, the full account may have to be paid out within five years after you die!
5. Review and change your plan as needed. For example, if your spouse dies, you may need to name another beneficiary.