This article discusses why it is important for people to name both a primary and contingent beneficiary on their retirement account. The reason why this is important is because there is always the possibility that the primary beneficiary might pass away before the testator. If no contingent beneficiary is named, then IRA benefits will likely be paid to the IRA owners estate. Naming a contingent beneficiary can give the IRA owner the ability to avoid the type of situation described in this column. Financial advisers should carefully review IRA beneficiary forms with their clients to make sure that all of the beneficiaries are accurately identified and a contingent beneficiary is named. Careful planning is important for people who want to make sure that their intentions are fulfilled.
See Michael J. Jones, The Importance of Naming a Contingent Beneficiary of a Retirement Account, Wealth Management, March 21, 2016.
Special thanks to Jim Hillhouse for bringing this article to my attention.
