Ed Slott: Get clients’ beneficiary forms in order

“I’m seeing retirement accounts lots because advisers are not checking beneficiary forms.

Everybody knows to check beneficiary forms. But, you have to be on top of this because it can have a devastating effect. Think about 100 per cent tax rate when you lose it all.

Now, there is no 100 per cent tax rate, unless you are a beneficiary that gets disinherited because a beneficiary form wasn’t updated – after a divorce or after a major life event.

You should go through all your clients and any time you spot a life event, for example a birth, a death, a marriage, a divorce, a new grand child, a change in the tax law like we had, but especially in the areas of divorce or naming a trust as a beneficiary, this is where we see high dollar big problems.

So isolate those clients and review beneficiary forms all the time. For every client. You’ll be amazed what you find.

And clients understand this. That’s the great part. They see the value you are providing.

So again, for the umpteenth time: check beneficiary forms, IRAs, 401(k)s, life insurance policies. On everything beneficiary driven.