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I used to have DW listed as my primary beneficiary for both my IRA and my 401(k). Since she as recently (within the past two years or so) been victim of several internet scams and for some reason continues to be strongly fascinated by emails from Third Word nations mentioning million dollar sums, I changed the primary beneficiary to my two DDs (50% each). Of course, if I die tomorrow, they will inherit the money and will take care of their mother, but DW will be unable to waste our money in support of criminal enterprises overseas.

But does this have other consequences that I'm not taking into account?

--SirTas

(cross-posted on the Inheritance Strategies board)
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I changed the primary beneficiary to my two DDs (50% each). Of course, if I die tomorrow, they will inherit the money and will take care of their mother, but DW will be unable to waste our money in support of criminal enterprises overseas.

But does this have other consequences that I'm not taking into account?


The major difference is that your daughters will face Required Minimum Distributions (RMD's) starting the year after your death, while your spouse could treat the accounts as her own. Of course, given DW's history, it probably wouldn't preserve the funds longer.

Phil
Rule Your Retirement Home Fool
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Did she sign a timely, properly written waiver? Unless she did, the beneficiary change may not be valid.
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But does this have other consequences that I'm not taking into account?



not an expert but pretty sure there should be no problem ..

(*i* found the RMD rules for Mom's IRA to be confusing ..you might get them a copy of Pub.590

withdrawals will be taxed as ordinary income

you might consider converting some or all to Roth to eliminate tax and RMD issues )


mostly just wanted to say --sorry about your DW ..i think i recall you mentioning this a couple years ago ..hoped it was something she'd get over.


=
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SirTas: <<<I changed the primary beneficiary to my two DDs (50% each). Of course, if I die tomorrow, they will inherit the money and will take care of their mother, but DW will be unable to waste our money in support of criminal enterprises overseas.

But does this have other consequences that I'm not taking into account?>>>

TMFPMarti: "The major difference is that your daughters will face Required Minimum Distributions (RMD's) starting the year after your death," [or be required to have the funds out of the IRA within five years after the eyar of yoru death] "while your spouse could treat the accounts as her own. Of course, given DW's history, it probably wouldn't preserve the funds longer."

You did not mention amounts, but generally speaking there is an unlimited spousal exemption, whereas assets going to others count toward lifetime exemption before estate tax might be due.

And as rad pointed out, DDs are not necessarily legally required to take care of your DW in the style to which she is accustomed.

Regards, JAFO
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Did she sign a timely, properly written waiver? Unless she did, the beneficiary change may not be valid.


a waiver is required??

generally, or just for spouses


( changed mine last year from sister to charity ...no waiver )
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a waiver is required??

generally, or just for spouses


Only when your spouse is not the beneficiary.
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Only when your spouse is not the beneficiary.

Let me try again, only when the account holder's spouse is not the beneficiary.
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Let me try again, only when the account holder's spouse is not the beneficiary.

and the account holder has a spouse.
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Let me try again, only when the account holder's spouse is not the beneficiary.

and the account holder has a spouse.



thanks ..that's how i failed the test and why my estate atty didn't mention it -- NoSpouse
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Did she sign a timely, properly written waiver? Unless she did, the beneficiary change may not be valid.

Can't I just decide on the beneficiaries for my IRA and 401(k) on my own?

--SirTas
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Can't I just decide on the beneficiaries for my IRA and 401(k) on my own?


For your IRA, yes.

For your 401(k), per ERISA (Federal law) the spouse is always the beneficiary unless that spouse waives that right.
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vkg,

Let me try again, only when the account holder's spouse is not the beneficiary.


I believe the spouse is supposed to agree to all beneficiary changes. You can't for example reduce your spouse's share beneficiary percentage without consent.

But what do I know, I am not legally married. And the California RDP my partner and I plan on having this year won't be federally recognized anytime soon. So I guess he may have no say over my 401k beneficiary elections. Even though some of the income that funds it will be considered community property under California law.
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Thanks, rikka7

--SirTas
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