Wills & Trusts

Complex Labyrinth of Rules Can Wreak Havoc on a Seemingly Clear-Cut Plan for Retirement Assets


Think you know who will get your retirement-account assets after your death? Think again.

Even those who seemingly have named beneficiaries on the right form might be surprised if they could see who actually gets the money, according to the Wall Street Journal.

Federal law, for example, trumps beneficiary designations for 401(k) accounts if the person named isn’t your spouse and your spouse hasn’t signed a waiver form, explains the article, which also details other twists and turns in inheritance rules concerning such holdings.

A complex labyrinth of rules, in which estate plans, benefits paperwork and federal and state law all may play a role in determining who gets what, causes confusion and can lead to unexpected allocations of assets, says attorney Edwin Morrow III, who works in KeyCorp’s private-banking division in Dayton, Ohio. “Even the best attorneys and accountants are bedeviled by it,” he tells the newspaper.

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