So you busted your butt and built up a large retirement plan. Congratulations, you done good.
But what happens if you get hit by a truck in a few days? Who is going to inherit that IRA? Your spouse? Your kids? Your ex? Do you really know? Did you name your trust as the beneficiary? If your trust wasn’t specifically designed to be the beneficiary of your IRA that could be a disaster.
Ok, lets assume your retirement plan does go to exactly who you want it to go to, have you made any plans to lower the amount of taxes that are going to be due? If you built up a really large retirement plan it could be hit with both income and estate taxes, google “income in respect of decedent”. Grab a beer first because it could get depressing.
Lets make another assumption, the retirement plan went to who you wanted it to go to and it wasn’t obliterated in taxes, what about asset protection? Is your beneficiary going to have the strength to keep the assets in your retirement plan where it is probably protected? Or might they fall to the temptation to take a distribution?
Most of the above issues can be controlled by just setting up the proper documents now, while you are alive and can control the situation. If you put it off, there is an awfully good chance that a large amount of that retirement you built up is going to go bust.