Part 1: Don't make this mistake!

On June 27, 2014, Jeanie Ahn, of Yahoo Finance reported an article titled " Man's mistake cost his children $400,000 of an IRA inheritance." In part, she reported the following story:

Mr. Smith worked with his financial advisers and attorneys to make sure his children received the balance of his retirement funds when he died. However, his IRA beneficiary form was filled out incorrectly. Instead of specifically listing the names of his children along with the percentages designated to each heir, Smith wrote: “To be distributed pursuant to my last will and testament.”

His failure to complete the form correctly invalidated the document, making his surviving spouse the beneficiary by default. “The children fought in court to recover the money, but the court awarded the $400,000 in the IRA to their father’s wife, who had married him two months before he died.

Many are unaware that long-forgotten beneficiary forms can override wills and undermine their loved ones' intentions. Beneficiary forms are meant to be a straightforward method for heirs to bypass the probate process and receive funds in a timely manner. But sometimes account holders forget they have filled out these forms and fail to update them with major life changes.

Your estate is governed separately from your accounts with beneficiary designations, which include retirement accounts, life insurance policies, bank accounts, certificates of deposit, stocks, annuity contracts, bonds, and mutual funds. If your last will and testament designates one person as the beneficiary and your IRA designates someone else, the IRA will outrank stipulations in your will.

Unfortunately, there are no automatic reminders to update these forms on a regular basis – the account holder has the responsibility to keep them current and valid."

Bradford Miller Law, P.C. can prepare all your estate planning documents and keep them updated. We will offer advice, and keep your estate plan current with the laws governing estate planning. And, you have the satisfaction of knowing that your affairs are in order, per your wishes. Visit our website for helpful information regarding Estate Planning and give us a call at 312-238-9298 for a FREE 15-minute consultation.

Posted by Bradford Miller Law, P.C.
Practicing in Real Estate Law, Landlord Tenant Law and Estate Planning
134 N. LaSalle Street, Suite 1040
Chicago, Il 60602
312-238-9298
http://www.bradfordmillerlaw.com

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