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Do not overlook your IRA in the estate planning process

It is never too early to set up estate protection for your family. While you hope that you will live to a great age, nothing is certain in life. Therefore it is important to make sure that provisions are in place to provide for those you love. Wills, trusts and other legal tools enable you to make your wishes known regarding the distribution of property to your heirs.

However, as you embark on your estate planning, it is important to understand how IRAs work. When your IRA was created, you received forms asking you to name beneficiaries. If you have had your IRA for quite some time, then you may want to take a look at those forms to see the names you wrote on them.

The reason for this is because IRA disbursements are generally not subject to wills. While you may have designated a new spouse or child to be the recipient, the funds may not go to that person, creating inheritance issues. Instead, the funds would go to the person listed on your beneficiary form. Even if you have not named a beneficiary for the IRA, there is no guarantee of who the funds will be given to. If you have more than one beneficiary for the account, then you should indicate on the form how much each beneficiary should receive.

Planning how your retirement funds, assets and other property should be divided is a complicated process. You should be aware of Florida laws regarding heirs and take the time to understand the many options available. Speaking with an experienced attorney may also be of great benefit.

Source: Forbes, “How To Leave Your IRA To Those You Love,” Deborah L. Jacobs, Jan. 3, 2014

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