How To Leave Retirement Fund IRA To A Friend
You have been saving for retirement for many years, and you want to make sure you know how to leave your retirement fund IRA to a friend in case of your untimely death. Thankfully, the process of leaving IRA funds to a beneficiary is quite easy. The important thing is to make sure that you complete the proper paperwork.
- Decide who will be your beneficiary or beneficiaries. There are options with beneficiary designations. You may leave the entire IRA to one friend, or you may split up the account among many people. Someone will receive the money that is in your IRA when you die, so you might as well make sure that it goes to someone of your choosing.
- Complete the beneficiary designation form. The company that holds your individual retirement account has the official form that needs to be completed to name your friend as the beneficiary. This form should be completed, copied, and filed. Tell your friends or relatives where a copy of the form is kept at all times. If the beneficiary cannot be reached by the IRA company after your death, the account may be handed over to your estate.
- Do not rely on your will to determine the IRA beneficiary. Leaving your retirement fund IRA to a friend will happen automatically without going through your will or estate provided the beneficiary designation form has been filed correctly. A will and its listed beneficiaries are in no way correlated to your IRA beneficiaries.
- Be careful when changing your designated beneficiary. You are allowed to change your beneficiary at any time as the owner of a retirement fund IRA. Filling out a new form is simple, but understanding the specific implications of the change may be complex. There may be issues related to the specific date that the new beneficiary takes over and the old beneficiary is removed. This is especially true when dealing with divorce and remarriage or other similar cases. Always consult your IRA specialist to learn about possible complications before changing the beneficiary of your IRA.