fbpx
Facebook Twitter LinkedIn YouTube Instagram Website Phone
Facebook Twitter LinkedIn YouTube Instagram Website Phone

Law Office of Inna Fershteyn and Associates, P.C.

Estate Planning & Elder Law Attorney

Law Office of Inna Fershteyn

Call Us: (718) 333-2394

Primary menu

  • Home
  • Practices
    • Wills & Trusts
      • Trust and Estates Roadmap
    • ESTATE Planning
    • Asset Protection
      • Medicaid Asset Protection Trust Lawyer NY
      • LLC vs S-Corp. Comparison
      • Special Needs Trusts
      • How to Legally Shield & Hide Assets from Creditors in New York
    • Probate and Administration
      • Power of Attorney New York
    • Guardianship
    • Elder Law
    • Medicaid Planning
      • New York Medicaid Changes 2022-2023 | Urgent Medicaid News
    • Medicaid Fraud
      • HRA FRAUD Inquiry RoadMap
      • HRA Implements New Policies on Charging People With Fraud
    • Fair Hearings
      • Medicaid Fair Hearings – MLTC
  • Will Package
  • Articles
  • About
  • Reviews
  • Resources
    • Preparing for Your Consult
    • COVID-19 Resources
      • Why TRUSTS are better than Wills after Covid-19 Estate planning?
      • Who pays for Nursing Home if I stay longer than 3 months?
      • Why Drafting a Trust is so Important During the Covid-19 Pandemic
      • Probate filing with Surrogate’s court after Covid-19: New Rules and Procedures
      • Unemployment Insurance Questions & Answers During COVID-19 Time in NY
      • Virtual Estate Planning NYC
      • COVID-19 Estate Planning Guide
      • COVID-19 Why A Health Care Proxy Is Critical Now
      • COVID-19 Emergency Estate Planning Tips
      • COVID-19 Coronavirus 5 Must Have Estate Documents
      • COVID-19 Caring For Elderly Parents
    • FAQs
    • Videos
    • Infographics
    • Glossary of Legal Terms
    • Read Our eBooks
    • Inna Fershteyn Radio Appearances
    • Yelp Reviews
  • CONTACT
Search

An Inheritance Shocker – Retirement Account Beneficiaries

Posted onJuly 26, 2010March 2, 2018AuthorInna FershteynComments Off on An Inheritance Shocker – Retirement Account Beneficiaries

retirement-account-beneficiary

What is a Retirement Account?

A retirement account, typically referred to as an Individual Retirement Account (IRA), is a form of “individual retirement plan”, provided by many financial institutions, that provides tax advantages for retirement savings in the United States.

What is a Retirement Account Beneficiary?

A retirement beneficiary can be any person or entity the owner chooses to receive the benefits of a retirement account or an IRA after he or she dies. Beneficiaries of a retirement account or traditional IRA must include in their gross income any taxable distributions they receive. IRA beneficiaries are typically inherited from spouses or from parents who wish to pass on their assets to their children.

What kind of benefits can I transfer into an IRA?

Typically, any assets can be transferred into an IRA. Retirement plans, 401k and any other financial assets can be transferred into an IRA for a beneficiary to later claim. However, there are limitations for an IRA, just as there are for everything else. Life insurance, forms of derivative trade (a contract between two or more parties whose value is based on an agreed-upon underlying financial asset (like a security) or set of assets (like an index)), and collectable antiques, no matter their worth, cannot be transferred into an IRA. Also, real estate for personal use (i.e. renting out for income) cannot be transferred in, as well as coins made of certain materials (gold, precious metals, etc.).

Do I Decide Who Gets the Money?

If you are divorced, remarried or have children from a previous relationship, make sure you have updated the beneficiary designation for your retirement plan at work. Otherwise, your spouse or kids could be in for a shock.

A shock is exactly what William Kennedy gave his daughter, Kari. The elder Kennedy married Kari’s mom in 1974 while working for DuPont. He named his wife as the beneficiary of his 401(k), and with no children at the time, he left blank the contingent beneficiary (who would get the money if the wife died first).

When the couple divorced in 1994, his ex-wife agreed to relinquish any rights to the money in the plan so that Kari would receive the money. But William did not sign new papers at work to officially change his beneficiary designation. So when he died in 2001, DuPont gave his ex-wife the proceeds — $400,000.

Kari sued DuPont, arguing that it violated the divorce decree by giving the money to her mother. The case made it all the way to the Supreme Court, which recently ruled in favor of DuPont. The court noted that Kari could sue her mother based on the divorce agreement, but that won’t do her any good. The majority ruled that DuPont acted in accordance with ERISA, the law governing retirement plans, which stipulates that beneficiary designations trump all other agreements. She told her hometown newspaper The Enterprise that her mother died in 2007 after moving to Norway and spending all the money.

Why Should I Open A Retirement Account?

It’s not enough to sign a contract or write a will. If you want someone to be the heir of your retirement plan at work, you must stipulate your instructions in the trust documents. Have you done your estate planning lately? Have you reviewed your beneficiary designations lately to make sure that the people you want to get your money are really the people who will get your money? If you haven’t done so recently, go to your attorney and do your estate planning properly.

CategoriesEstate Planning, Shared ArticlesTagsasset protection, elder Law, estate planning, individual retirement account, retirement account beneficiary, What assets can I put into an IRA?, Why should I open an IRA?

Post navigation

← Previous Previous post: Gifted and Talented Programs in NYC 2010 – Increase in High-Scoring Students
Next → Next post: Can my Ex-Wife get something when I die?

Contact Us

    Immediate response in 1 hr.
    Flat Fee Retainers Are Available.
    Call (718) 333-2394. 

    BLOG Categories

    Subscribe


     


    Get legal help today from our Principal attorney

    (718) 333-2394

    Address:
    1517 Voorhies Ave 4th Floor,
    Brooklyn, NY 11235
    Open 24 Hours

    Legal Connections

    Advanced-Legal
    Medicaid-Fraud
    Estate Lawyer
    Estate Blog

    Brooklyn Office

    1517 Voorhies Avenue, 4th floor
    Brooklyn, NY 11235
    Phone: (718) 333-2394

    BROOKLYN MAP

    Manhattan Office

    310 East 2nd Street, #9A
    New York, NY 10009
    Phone: (718) 333-2395

    MANHATTAN MAP

    Long Island Office

    8 Delacey Avenue
    East Quogue NY 11942
    Phone: (718) 333-2395

    LONG ISLAND MAP
    Wills and Trusts | Estate Planning | Asset Protection
    Medicaid Planning | Elder Law | Guardianship
    Medicaid Fraud | NY Will Probate | Fair Hearings
    Copyright © 2023 Law Office of Inna Fershteyn and Associates, P.C.. All Rights Reserved | Attorney Advertising: This website is designed for general information only. The information presented on brooklyntrustandwill.com should not be construed to be formal legal advice or the creation of an attorney/client relationship.
    Law Office of Inna Fershteyn and Associates, P.C. Estate Planning Attorney - 1517 Voorhies Ave 4th Floor, Brooklyn, NY 11235 | Phone: (718) 333-2394 | Get Directions | Privacy Policy