In situations where a beneficiary predeceases the owner of an IRA account, it is best to remove the deceased beneficiary, replacing them with another living beneficiary. It is especially important to ensure your named beneficiaries at all times stay up to date. The same goes for beneficiaries named on other accounts, policies or even within a Last Will and Testament.
We often see cases where updates were never made to named beneficiaries, which can cause a multitude of problems once an owner passes away. If a primary beneficiary is named, but is deceased, then it is possible for the asset to pass to the contingent beneficiary if one is named. If no contingent beneficiary is named, the asset will often go through probate, passing them by the owners Last Will and Testament.
If you have any questions about the topic discussed in this article, or any tax or estate law matter, please give us a call at Bononi & Company 724-832-2499.