Coordinating Retirement Benefits and Your Estate Plan


For many people, their retirement benefits are one of their most significant financial assets. Aside from helping you to enjoy a comfortable retirement, your benefits play a key role in developing your estate plan.

Any money left in Individual Retirement Accounts (IRAs), Keoghs, 401(k) plans, or 403(b) plans at the time of your death goes to the beneficiary you have selected without going through the probate process.

You have several options when choosing a beneficiary. For someone who is in a first marriage, the spouse is typically named the primary beneficiary with adult children listed as alternate beneficiaries. If you are single and have a minor child, the money would need to be left in a custodial account that has an adult who is willing to manage the money on behalf of the child. If you are single and have no children, you might chose to name a charity or other nonprofit organization as the beneficiary.

Beneficiaries must make required minimum distributions (RMDs) from your retirement account. They will in most cases be required to pay income tax on these distributions. If your RMDs have not yet begun, the RMD is based on the beneficiary's statistical life expectancy. If your RMDs have already begun, the RMD is based on the amount you would have been required to withdraw in the year of your death and the beneficiary's statistical life expectancy for future years. If RMDs are not made as required, there is a 50% tax on the amount of money that should have been withdrawn.

How Can We Help?

Navigating the estate planning process can seem confusing, but you don't have to go through it alone. An experienced estate planning attorney can help you evaluate your options and create an estate plan that best addresses your unique needs. If you are in need of legal representation relating to an estate planning issue, please call our office at (626) 683-8113 or email us at