IRA Beneficiary Form Mistakes

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The reason most stretch IRAs will never happen is because most people, including advisors, do not take care of the one thing that will guarantee the stretch IRA. That one thing as I’ve said many times here already, is simply naming a living, breathing beneficiary. Most people ignore this or think someone else took care of it or it’s covered in the estate plan or the will or somewhere. It isn’t.
Most people do not realize the importance and long-term significance of the IRA beneficiary designation form and lose track of it. It is interesting that most people can locate their wills, but the wills do not cover the IRA. The IRA passes outside the will by beneficiary designation.
Where’s the Beneficiary Form?
Think about it. I certainly do not wish anything bad on anyone, but let’s say something terrible happened today, and you had to leave this minute and go home and put your hands on your own IRA beneficiary form for every IRA or retirement account you have; could you do it? For most, the answer is “No.”
This is incredible. Some people think, “Well, the bank must have it.” They don’t. With all the recent bank mergers, the retirement plan paperwork has not been followed up on. The paperwork is not being carried over to the new institution. The old bank may have brought it to the new bank but the new bank used new forms and didn’t enter the information. Clients may be surprised to go to the new bank now and ask for those beneficiary forms only to find out that the beneficiary forms are blank, meaning that the estate may now be the beneficiary.
It is not uncommon for brokers to move to a different firm. When the broker switches to a new brokerage firm, the paperwork is often lost in the shuffle.
For the biggest financial institutions keeping track of IRA beneficiary forms or updating them is not a big priority.
This is the time to provide real tangible value by checking these forms and moving the money away from these crumbling financial institutions.
Right now, more people are looking to move to an advisor who is on the case, working for them. Get the conversation started by checking beneficiary forms.
It is amazing to think that the one document that:
  • Will determine how long you will be in business
  • Will determine the value of your practice
  • Is the main estate planning document for what may be the largest asset in the client’s estate
  • Controls the distribution for money that the client worked for and saved for his entire working life
  • Is in effect, the will for the IRA
  • Will guarantee the stretch IRA
…Cannot be found by anyone in America anywhere!

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