Beneficiary designations on financial accounts, retirement accounts including IRAs, and life insurance policies are a very useful option to pass your property to your beneficiaries upon death without probate or trust agreements. Beneficiary designations, however, have certain hidden pitfalls. One of the most common estate planning mistakes I see is where parents name their minor children as beneficiaries on their financial accounts. If the parents were to die while the child is a minor, significant issues would arise. Also, sometimes individuals will name trusts as the beneficiary of an IRA or retirement plan without the proper underlying planning. You should seek professional advice regarding beneficiary designations so they provide you the desired benefit, and not create problems for your family.
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