Choosing the Right Beneficiary (for the Right Reasons) Daniel Timins, Esq., CFP® The Law Offices of Daniel Timins 477 Madison Avenue, Suite 240 New York, NY 10022 (212) 683-3560 www.TiminsLaw.com

Why the Right Beneficiary Matters The right person gets the money Tax Savings You control your estate’s destiny You protect your family

When Beneficiaries Apply Joint Accounts Retirement Plans Life Insurance TOD (Securities) & ITF (Bank) Accounts Wills & Trusts

The Worst Beneficiary: Your Estate! Retirement & Life Insurance is protected from your creditors…unless your Estate is the Bene Retirement Plans MUST be distributed within 5 years Court, Attorney & Accountant fees are increased Takes more time to collect funds (because of Probate)

Best Retirement Plan Beneficiary: Your Spouse Younger spouse can transfer to her IRA and use her Required Minimum Distribution rate RMDs increase as you age: 71 year old = 3.77% RMD 93 year old = 9.6% RMD Younger spouse can defer taxes / withdraw slowly Older spouse can keep it in deceased spouse’s IRA Name a “See Through” Trust as Contingent Bene Creates an “Inherited IRA” using each child’s life expectancy

Best Life Insurance Beneficiary: A Trust Proceeds may avoid estate taxes & grows estate tax free Spouse can still have full access to funds Can set terms for children “No drug dependency” Pay in increments Separate from child’s marital assets Spouse / child doesn’t even need to be a Contingent Beneficiary

The Low Down on Joint Accounts The Good: Avoids Probate (easy to transfer) Survivor can “Renounce” other spouse’s half If between spouses: Considered 50% / 50% The Bad: Usually more taxes at survivor’s death If between non-spouses: Assumed 100% / 0% Source of friction between siblings

Best Beneficiary for Other Assets: TOD, ITF, Revocable Trusts Easy to collect All avoid Probate (but not estate taxes) “Private” Transfers Less contention between children siblings