At many IRA custodians, when you open an account you’ll be asked to sign a pre-printed signature card and account agreement, on which you’ll name beneficiaries. These standard agreements might be limited, in terms of the options they offer, and they must comply with the appropriate state laws.
If your plan will not conform to the standard contracts, what can you do?
- Be vigilant. If an IRA beneficiary should predecease you, update the beneficiary designation.
- Leave your IRA to a trust. Another alternative is to create a trust and instruct the trustee as to how you’d like the IRA distributed. (Be sure to work with an experienced attorney if you want to leave your IRA to a trust.)
- Go elsewhere, within the same firm. At a bank, for example, another option is to work with the bank’s investment department or trust department, rather than with front-line personnel. These other departments may have more expertise in sophisticated estate planning for IRAs.
- Prepare your own custom beneficiary form. Working with the aid of a professional advisor, you can provide your own beneficiary designation. Submit it to the bank so it can be acknowledged, signed, and dated by a bank officer. Keep your copy with other vital estate planning papers, to make life easier for your survivors.
