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Designating An IRA Beneficiary

Designating An IRA Beneficiary


If you have an IRA, this is not what you want to happen–an incomplete or missing named beneficiary. This is more common than you think. The good news is designating a beneficiary or updating one is not complicated and pretty easy to do.

According to the largest independent retirement recordkeeping services provider, Ascensus, more than one-third of all IRA death claims that it processed had no named beneficiary.

A financial planner and trusted advisor can provide you with all the ingredients for investment success.

Here is a brief tutorial on what you need to know about naming an IRA beneficiary and why this is important.

How to name an IRA beneficiary on a new account application or update a current account

If you already have an IRA, you can change your beneficiary either by going online with the firm that holds your IRA or by submitting paperwork provided by them.

You can also change the beneficiary by filing a new application with the firm that holds your IRA. If you have accounts at multiple firms, then you will need to contact each one individually and complete this process for each account.

Inherited IRA

If you’ve inherited an IRA here are a few things to consider. But first, what is an Inherited IRA?

According to Investopedia, an inherited IRA is:

“An inherited IRA is an account that is opened when an individual inherits an IRA or employer-sponsored retirement plan after the original owner dies. The individual inheriting the Individual Retirement Account (IRA) (the beneficiary) may be anyone—a spouse, relative, or unrelated party or entity (estate or trust).”

If there is no such designation, then the IRA will pass to the closest relative according to what is called “laws of intestate succession.”

You’ll also have to check whether or not your beneficiary inherits any other property at all; in some states it’s possible that even if someone dies without leaving a will behind them—or even if they did but forgot about their retirement accounts—their estate would still be divided up according to state law anyway!

What happens if you don’t name an IRA beneficiary?

If you don’t name a beneficiary, the IRA will go to your estate. The person responsible for settling your estate will be responsible for paying taxes on the assets in your IRA and then distributing those assets according to state law.

It’s possible that your beneficiary designation won’t be honored because of this process. If that happens, here are some things to consider:

  • The responsibility of paying taxes on an inherited retirement account can be overwhelming if it’s not something you’re used to doing yourself (or have time or money for).
  • There may not be enough money in the estate after all debts have been paid off and expenses have been taken care of—it’s possible that no one will receive any inheritance at all if there isn’t enough left over after taxes are paid!

What are the rules for passing on an IRA?

Inherited from spouse

If a traditional IRA is inherited from a spouse, the surviving spouse generally has the following three choices:

  • Treat it as his or her own IRA by designating himself or herself as the account owner.
  • Treat it as his or her own by rolling it over into a traditional IRA, or to the extent it is taxable, into a:
          a. Qualified employer plan,
          b. Qualified employee annuity plan (section 403(a) plan),
          c. Tax-sheltered annuity plan (section 403(b) plan),
          d. Deferred compensation plan of a state or local government (section 457(b) plan), or
  • Treat himself or herself as the beneficiary rather than treating the IRA as his or her own.

Inherited from someone other than a spouse

If the inherited traditional IRA is from anyone other than a deceased spouse, the beneficiary cannot treat it as his or her own. This means that the beneficiary cannot make any contributions to the IRA or roll over any amounts into or out of the inherited IRA.

However, the beneficiary can make a trustee-to-trustee transfer as long as the IRA into which amounts are being moved is set up and maintained in the name of the deceased IRA owner for the benefit of the beneficiary.

Like the original owner, the beneficiary generally will not owe tax on the assets in the IRA until he or she receives distributions from it.


That’s all there is to it! You can easily add or change your IRA beneficiaries online. The time to think about who should inherit your retirement assets is before you die—not after. If you don’t name an IRA beneficiary and leave your account to your estate, then your heirs may have a harder time accessing those funds.

As always, call us if you have questions about your beneficiaries.

Have a great weekend.

Source: IRS Retirement Plans

Golf Tip of the Week

Moving From The Range To The First Tee

Why can’t I take my range game to the golf course?

This is one of the many challenges faced by all levels of golfers who continue to be frustrated by this transition. The answer to this question involves several possible mistakes golfers often make. With a little tweaking you can make a successful transition from the range to the course!

One reason for poor transition from the range to the game is purpose. While on the range, before a round, you are usually trying to get comfortable with your swing. You are trying to see how it feels that particular day, searching for some swing key, etc. However, when you get to the tee during a game it’s all about performing: hitting a good golf shot, avoiding trouble, and trying to make as few strokes as possible. With such different purposes, it’s no wonder you make an entirely different swing on the first tee than on the range.

Another reason for poor tee performance is fear. If you hit a poor shot on the range there is no penalty; however, on the course it matters greatly as there are consequences. Fear now enters the picture, which introduces tension. With tension in the mix, your tempo becomes affected, which ultimately hampers the freedom with which we swing. A common mistake many golfers make on the range is hitting the same club over and over again until you get it right. You just set up and hit ball after ball, over and over again with no specific target in mind. Once you get to the first tee, however, it is completely different. Now you have to aim at a target and focus on where you want to send the ball, your alignment suddenly becomes important. Your rhythms are different from the range to first tee, and you need to make that transition in order to be successful. One way to correct this problem is to imagine playing a few holes while at the range. For example, pick a target on the range and visualize hitting there with your driver, imagine the shape of the fairway, and hit the shot required, fade or draw etc. Then look for a flag that mimics your approach to the green, and play that shot. Do this for a par-5, par-4 and even a par-3. This will give you more real-life course conditions, and better prepare you for your upcoming round.

In conclusion, changing the way you practice your pre-round warm-up by visualizing the course and shape of the fairway and practicing with a target will help you make a successful move from range to first tee. You come away with a sense of already playing a few holes when you get to the first tee. This will give you the confidence needed to have a more enjoyable round and a better overall experience.

Tip adapted from golftipsmag.comi

Recipe of the Week

Cocktail Sausage Mummies

24 servings


  • 24 beef chipolata sausages
  • 1 egg, lightly whisked
  • 4 sheets (25 x 25cm) ready rolled puff pastry
  • Mustard, to decorate
  • Ketchup, to serve


  • Preheat oven to 390F. Line 2 baking trays with baking paper.
  • Preheat stove on medium-high. Cook sausages turning, for 6-8 minutes or until golden brown and cooked through. Remove and set aside to cool.
  • Use a small sharp knife to cut the pastry into 1cm-thick strips. Lightly brush pastry with a little egg. Wrap 2-3 pastry strips around each sausage to resemble bandages, leaving a little gap at one end for the face. Trim and discard excess pastry. Place on the lined tray. Repeat with remaining sausages, pastry and egg.
  • Bake in preheated oven, swapping trays halfway through cooking, for 20-25 minutes or until golden brown and puffed. Remove from oven and set aside to cool slightly. Use the mustard to decorate the mummies with eyes. Place on a serving platter, serve with mustard and ketchup.

Recipe adapted from

Health Tip of the Week

5 Tips For Preventing Sports-Related Injuries

Sports injuries generally occur for two different reasons: trauma and overuse,” says Dr. Andrew Cosgarea, an orthopedic surgeon and sports medicine expert. “And while traumatic sports injuries are usually obvious, dramatic scenes, like when we see a player fall down clutching their knee,” continues Cosgarea, who is also the head team physician for Johns Hopkins University Department of Athletics, “overuse injuries are actually more common.”

Overuse injuries often occur when the body is pushed past its current physical limits or level of conditioning — but poor technique and training errors, such as running excessive distances or performing inadequate warm-ups, frequently contribute. To help keep you or your young athlete from experiencing a sports-related injury, Cosgarea provides the following prevention tips:

Set realistic goals.

“I am a strong advocate for setting goals and working hard to achieve them,” Cosgarea says, “but it is crucial that our goals are realistic, achievable and sustainable.” Whether your goal is to swim more laps, lift a certain amount of weight or run a specific distance, set an obtainable goal and gradually work to improve.

Plan and prepare.

If you plan to begin exercising regularly or want to begin a new program, you should meet with your primary care provider first and discuss your options. Also, take the time to learn the proper techniques required for your sport or program. Working with a personal trainer or signing up for a class are often safe and enjoyable ways to start a new activity, Cosgarea suggests.

Warm up and cool down.

It is important to warm up before physical activity because research has shown that a heated muscle is less likely to be strained. To accomplish this, Cosgarea recommends some light walking or jogging before you start your exercise and then again afterward to help your muscles cool down slowly. Another important way to prevent injury is to increase your flexibility. This can be done by stretching before and after a workout, Cosgarea suggests, but it is best to do so once the body is already warm.

Take your time.

Don’t push yourself too hard too fast. Getting in shape or learning a new sport takes time. “We need to allow for adequate time to gradually increase training levels so that our bodies have time to adjust to the stresses on our bones, joints and muscles,” Cosgarea says. For instance, when running, increase mileage gradually and give yourself plenty of time to recover between workouts. 

Listen to your body.

Adjust your activities if your body is showing signs of too much stress. “While a mild and short-lived muscle ache is generally considered ‘good pain,’ pain in your joints is not normal and is a sign that you should cut back,” Cosgarea warns.

Tip adapted from

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