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Disaster Proof Your IRA

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By: W. Bailey Smith, Esq. An IRA is an individual retirement account. It is owned by you, an individual, not your trust. An IRA is a retirement account and is similar to a 401(k), a 403(b) account, or a pension plan. These same disaster-proof rules apply to all 3 of these accounts.

  1. These are usually tax-deferred accounts and pass by way of beneficiary designation forms pursuant to contracts with particular institutions. As a general rule you should name your spouse as your primary beneficiary (or anyone you want if you are single), and name your adult children as secondary beneficiaries.
  2. Name a second “contingent” beneficiary in case your primary beneficiary dies and to allow for disclaimer opportunities under the IRA rules to do estate planning after you pass on.
  3. Get copies of every beneficiary designation form for each and every IRA.
  4. Keep copies of the beneficiary designation forms with your other estate planning documents and give them to your estate planning attorney and financial planner.
  5. Tell the IRA beneficiaries where you placed your beneficiary designation forms.
  6. Review your beneficiary designation forms yearly to ensure they are correct and reflect current tax changes and major changes including if somebody forgets your birthday.

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