Tax Tip of the Week
June 2, 2008


Beneficiary Designation Form
Make this simple estate tax planning move

Want to save time, taxes, and problems for your heirs? There's a simple document you can complete that will help you do all those things.

• What it is.

  It's called a Beneficiary Designation Form. If you own IRAs or other retirement accounts, it can be an invaluable part of your estate plan - even if you already have a will.

• What it does.

  The form allows you to designate who receives your retirement plan assets after your death. It's legally binding and overrides your will.

• Why it's important.

  Retirement plan assets are generally subject to estate and income taxes. When you fail to designate a beneficiary, the property in your plan passes to your estate and is distributed according to the terms of your will.

  What's wrong with that? Under tax law, when there's no designated beneficiary, your estate generally must distribute your retirement plan fairly quickly. That means your loved ones lose the benefit of putting off the related tax bill as long as possible.

  Filling out the beneficiary designation form can avoid those problems.

• How to make it work for you.

  Think about your entire estate before selecting retirement plan beneficiaries. The ages of your loved ones, as well as the type of assets you own, can influence the tax results. Other factors to consider include your charitable plans and whether your spouse is a U.S. citizen.

Call us to schedule a review of your estate plan. We can help you and your attorney set up beneficiary forms that will carry out your intentions while minimizing the tax impact to your heirs.

Questions for our Financial Expert?
E-Mail us at: finance@ClevelandSeniors.Com