Planning for the disposition of retirement benefits is an often overlooked and misunderstood aspect of estate planning.  Increasingly, retirement benefits (IRA's, 401(k), 403(b), pensions, etc.) comprise a large portion of a person's estate.  Proper retirement benefit planning requires that you consider both income and estate tax issues, along with asset disposition, beneficiary and management issues.    

Income Tax Planning.  Income tax planning for retirement benefits generally focuses on delaying and stretching out distributions for as long as possible to minimize income tax deferral opportunities for your beneficiaries (i.e. "stretch IRA").  How you structure your beneficiary designations will have important income tax ramifications for your beneficiaries.  The decisions are very individual-based and will depend on your family, your other estate planning documents and your overall estate planning goals.

Designation Form Considerations.  Attention should always be paid to the careful coordination of beneficiary designations, other estate planning documents and your goals.  It is not uncommon for beneficiary designations to not match a client's goals because they were either drafted improperly or have not been updated.  Attention should also be paid when a potential beneficiary is a minor.  If not properly structured, such designations can force the necessity of a guardianship estate for the minor, which can be costly and cumbersome.

Retirement benefits are an integral part of many estate plans that should not be overlooked.  The unfortunate myriad of technical rules and regulations, especially those relating to post-death rollovers and distributions, makes it essential to seek out qualified professional help regarding your options from an attorney and/or a CPA.

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Disclaimer:  All content provided is brief general information and not intended as legal advice.  Always consult an attorney before acting.  Please read full disclaimer at the bottom of the page.

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As part of its comprehensive estate planning process, The Law Offices of Robert H. Glorch completes beneficiary designation forms for its clients to ensure that they are coordinated with the client's entire estate plan in a manner that is as tax and transfer efficient as possible.

To inquire or retain representation, please see how to get started to learn about our estate planning process and call us at (847) 991-2250 to schedule a free initial estate planning consultation.