For many Kent residents, an individual retirement account may be their most significant personal asset. A person's IRA often represents both a source of retirement benefits and the source of an individual's legacy to heirs. Because IRA assets pass directly to designated beneficiaries, they can provide a convenient way to avoid the complexities of estate administration. Unfortunately, people commonly make simple mistakes when it comes to naming the beneficiary of an IRA that can lead to unintended consequences.
Kent residents may have heard the tragic story about a man who set fire to a rental home in the town of Graham, killing himself and his two children. With the man's wife having been missing since December 2009, the woman's parents turned to the Washington courts for authority to oversee the administration of her estate. The court relied on a probate law aimed particularly at missing person cases in order to appoint the parents as special estate administrators.
Readers in the Seattle area who anticipate inheriting a loved one's individual retirement account may want to take note of some frequently disregarded considerations that can have serious inheritance tax consequences. As long as taxpaying beneficiaries act quickly and avoid some common mistakes, certain opportunities are available to increase the long-term value of an inherited IRA and avoid double taxation.
Readers in the Seattle area may take a lesson from an unfortunate tale that left one man's wife grieving while his ex-wife harvested a $1 million windfall. In a case of tragic oversight, the deceased man never followed up to change the beneficiaries of his lush retirement account and life insurance policy. The result of this all-too-common error undoubtedly sabotaged the man's wishes for his second wife and highlights the importance of competent estate planning early in life.
Many Washington residents in the Kent area may feel confident about their current estate plan. But to ensure that the assets included in a family inheritance are protected, there may be certain modifications that are necessary for an estate plan to remain a strong one.