CHECK YOUR BENEFICIARY STATEMENTS PLEASE!!!

If you own an IRA or 401K account, there have been a number of court cases decided in the last few years that might be very important for your consideration.  One case in particular involved a life-long school district employee that had been working for a school system since her graduation from college.  When she was first employed she named her sister as her beneficiary on her pension plan.  The beneficiary declaration is often a simple one page document and filled out in a matter of minutes.  She went on to marry and have children.  She had a valid will drawn up that appointed her husband and family the beneficiaries of all she owned, including her pension proceeds.  HOWEVER, she did not ever change the original beneficiary statement that appointed her sister as her beneficiary.

At her death, the family had the unfortunate prospect of learning that the pension proceeds would go to the sister, not the family.  This was litigated clear to the supreme court who, in a 9-0 decision, upheld the payment of the proceeds to her sister (ultimately her sister’s estate).

TAKEAWAY:  Whether you have a 401K or an IRA, you need to be reviewing those beneficiary statements and making sure the person(s) that you want to receive your funds in the event of your death are correctly stated.  Even if you have a valid will, the beneficiary statement will control the payment of the funds.

Please don’t hesitate to contact us here at SWAP if you have any questions about your IRA or 401K account.  Our team of professionals can assist you with everything from pension design to planning IRA distributions.

Larry Filener, Owner  / Southwest Accounting Pros, LLC

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