IRAs deserve a spot check in your spring estate planning review, and many people overlook them entirely.
Your IRA beneficiary designations control who receives your account after you die, and they bypass your will. That means if your IRA lists an ex-spouse as the beneficiary but your will names your current spouse, your ex-spouse gets the money. The same conflict happens when you name adult children but want the funds to go to your estate or a trust.
The rules changed significantly after the SECURE Act passed in 2019 and again with the SECURE 2.0 Act in 2023. Non-spouse beneficiaries now face a 10-year deadline to withdraw inherited IRA funds, with required minimum distributions starting in year one depending on the beneficiary's age. This creates tax headaches if not planned carefully.
Start by pulling up your account statements from Fidelity, Vanguard, Charles Schwab, or your bank. Look at the actual beneficiary designation forms. Your broker's website shows this, but the legal document matters most. Then cross-reference these names with your will and trust documents. If you've divorced, remarried, had children, or experienced other life changes since opening the account, your designations likely need updating.
Contact your financial institution directly to request new beneficiary designation forms. Email and phone work, but submitting forms in writing creates a paper trail. Name primary and contingent beneficiaries. If you want multiple people to inherit, specify percentages. If you want an IRA to fund a trust for minor children, name the trust as beneficiary and have an estate attorney review the language.
Consider naming different IRA accounts to different people if that aligns with your goals. Some people designate their largest IRA to a spouse (who gets special rollover options) and other IRAs to children or charity.
Schedule this review every