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Dead Man's Outdated Beneficiary Form Proves Costly

We have discussed the importance of an IRA beneficiary form at length. You should always know where a copy is for yourself and make sure your financial advisory team has a copy on hand as well. Also, you must make sure the beneficiary form is current to reflect your financial wishes (who is getting what).

The IRA beneficiary form does NOT just change on its own. You need to update it after life events (birth, death, marriage, re-marriage, etc.). This article from Forbes is just another in a long line of horror stories we hear all of the time. In this case, a man didn't update his beneficiary form, and over $1 million of financial assets went to his ex-wife.

Stories like this are avoidable with proper planning. Read this article and share its message with friends, family and clients. And when finished, make sure you have your updated beneficiary form in a safe place.


-By Jared Trexler



Thursday's Slott Report Mailbag

Consumers: Send in Your Questions to [email protected]

Q: I stumbled onto you through a Morningstar newsletter which indicated you saying that I could turn my old 401(k) account into a Roth IRA. I checked your website and found the following in the FAQs.
Can I convert my IRA or employer plan to a Roth IRA?All funds in traditional IRAs, SEP IRAs, and employer plans such as 401(k)s are eligible to be converted to a Roth IRA. Funds in a SIMPLE IRA can also be converted AFTER the SIMPLE account has been open for two years. A conversion before that date will be subject to a 25% penalty tax on the amount withdrawn AND the funds are not eligible for transfer to any other type of plan except another SIMPLE. To do a conversion of employer plan funds, you must be eligible to take a distribution from the plan.