Identify Your Needs

I am concerned about the implications of whom I designate to be the beneficiary of my IRA.

You may not realize it, but whom you select as beneficiary plays an important role in IRA distributions - both for yourself and for the person you designate. Before signing on the dotted line, take a few minutes to understand the possible effects of your decision.

Do you want to name your spouse as beneficiary?

If so, you’re in luck, as this is perhaps the least complicated situation. Under current law, your husband or wife can decide how and when to receive your IRA proceeds. And because you’re married, the proceeds may not be subject to those nasty estate taxes.

Do you want to designate another family member or friend?

Here, the laws get a little more complex. The funds are subject to estate and income taxes when you pass away. And if you’ve saved a lot of money, the taxes could be quite substantial. If you’re married but still wish to name another person as beneficiary, your husband or wife must generally agree before the paperwork can be finalized.

Do you want to name a trust, estate or charity as beneficiary?

Federal estate taxes will be greatly reduced by doing so. And you’ll control how your money is spent after your death. But it may significantly affect the amount of your required minimum distributions.

If you’re serious about donating to a favorite charity, consider the Raymond James Charitable Endowment Fund. The fund is one of many alternatives available that contribute to organizations on your behalf.

Assign an alternate

No matter whom you choose, it’s always a wise idea to select a contingent beneficiary - someone who will receive your money should something happen to your original designee.

Your beneficiary - don’t set it and forget it

After you select the right person, remember to evaluate your decision at least once a year. If your circumstances change, designate a new heir for your IRA immediately. By doing so, you make sure your assets end up in the right hands.

There are other implications associated with selecting IRA beneficiaries - some of which may be irrevocable. For more information about your designation options, contact your Raymond James financial advisor or use the Office Locator to find our office(s) nearest you today.