Should You Share Your IRA Beneficiary Form Information with Your Financial Advisor?

Who needs to know what you’ve included on beneficiary forms? How does this make your estate planning easier or harder? 

An advisor who is not kept in the loop about your IRA decisions can become extremely confused or could even delay the process of your loved ones getting the necessary benefits after you pass away.

A common question asked by financial advisors who haven’t been kept in the loop is: where is the beneficiary form? One of the most valuable services that you can provide as a client of a financial advisor is to explain your decision-making process and provide your financial advisors with information about who you have chosen to be the beneficiary or primary in contingent beneficiary on your IRA.

More in depth planning conversations can be had between you and your financial advisor when he or she is aware of your decisions.

The beneficiary form review is important because as life circumstances change, you may need to update these materials and updating your other estate planning documents without also considering how the IRA beneficiary form can be affected could be a big mistake.

Beneficiaries could be forced to face unnecessary and unfortunate legal, financial and tax obligations. If this person is not clear in advance that they were named as a beneficiary in your IRA, they may struggle to figure out how to distribute these funds if there are no clear instructions, or more legal challenges. This often means expensive and time intensive family and legal disputes that don’t end well and can even rip families apart.

These mistakes can be very easily avoided by verifying that your beneficiary forms are updated accurately when you have told your financial advisor about what these include. Scheduling a consultation with your financial advisor at the same time that you review your estate planning documents with your estate planning lawyer on an annual basis can help to ensure that all of your individual needs have been taken into account.



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