The single most meaningful service you can provide to your clients is to keep a copy of their IRA beneficiary designation form on file for them.
Also, make sure that the client’s beneficiaries know to contact you after their death. After the client dies, their beneficiaries should know that they do not have to wonder where the forms are or if they even exist at all. They can come to you and know you’ll have a copy of the beneficiary form (similar to the way that beneficiaries go to the attorney for the will after the death of a loved one). That form could potentially offer them the opportunity of a lifetime stretch IRA, depending on the inheritance amount, if they want to take advantage of it. You’ll have one happy new client… the beneficiary… or several new clients if there are multiple beneficiaries. This is how you add life and value to your business.
It is not enough to keep the IRA beneficiary form on file. You must review these forms with clients no less than once a year or more often if any changes due to life events or new tax laws warrant it. For example, as the estate tax exemption changes, you may need to adjust assets that pass under that exemption, leaving as much as possible to the children estate tax free.
It is up to you to develop the kind of relationship with your client so that there will be communication when events that will lead to beneficiary form changes occur. That form must be continually kept up to date.
Every client file should have a current beneficiary form inside it. That must be a priority. You may have to contact many clients. That’s okay. That’s also good business.
Should you look for missing beneficiary forms? NO! Don’t waste your time. All prior choices can be changed now anyway. Have clients execute new beneficiary forms and you keep those forms on file for them.
Do the same for your own retirement accounts.
