Kathryn T. Joseph & Associates, Inc.

Making beneficiary designations

Some assets, including 401(k)s and IRAs, are passed down not by wills or trusts but by beneficiary designations. However, since these may be filled out in a flurry of employment paperwork, beneficiary choices might not be made carefully. A person might also forget about the beneficiary choices. This could lead to problems later if an ex-spouse remains on the paperwork or a child is excluded. People in Ohio should take certain criteria into account when making beneficiary designations.

It is possible to name multiple beneficiaries, and even if there is only one primary beneficiary, one or more contingent beneficiaries should also be named. A spouse may be the best choice for this particular asset because of the benefits offered, such as the ability to roll a 401(k) or IRA into the spouse's retirement account. If minor children are chosen, they must have a guardian or a trust must be set up. For special-needs relatives, a trust protects their access to government benefits. A charity can also be a beneficiary.

Taxable brokerage accounts and other assets may also have beneficiary designations, and the same considerations should be observed. Beneficiary designations usually override wills and trusts, so they should be chosen in a way that works with the rest of the estate plan.

In an estate plan, trusts may be set up as separate from beneficiary designations as well. They have a number of uses, including reducing taxes and managing money for irresponsible heirs. The right trustee should be chosen as this person is responsible for carrying out the trust instructions. It may help to choose someone with a financial or legal background, or a trustee could be a professional like an attorney or an entity like a bank.

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Kathryn T. Joseph & Associates, Inc.
Executive Commons West
29425 Chagrin Blvd.
Suite 305
Cleveland, OH 44122

Toll Free: 888-335-6650
Phone: 216-245-0504
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