By: Martin M. Shenkman, CPA, MBA, JD
Retirement plan beneficiary designations prepared on pre-printed bank and brokerage firm forms can treat contingent beneficiaries in different ways then you intend. Take for example, a family with three children. If you name all of the three kids as beneficiaries, and one child dies, you might wish that deceased child's heirs (contingent beneficiaries) receive his share. But some forms mandate that the contingent beneficiaries only receive distributions if all primary beneficiaries (your children) die. Your intentions would not be fulfilled, so exercise caution when completing such forms to make sure they really adhere to your wishes. If you want the decedent's heirs to inherit, then specifically mention that. Modify your forms according to your wishes.
Horror stories of lost forms abound. Be sure that after signing any significant document, you make a copy for your files and for your CPA to place in his permanent file for you. Also, send one to your estate planner. Have the professionals look over the documents to ensure that they accomplish all your goals.
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