How Can I Protect My IRA Accounts for My Heirs?

When it comes to estate planning and retirement accounts in Colorado, the one thing you should try to avoid is making your estate the beneficiary. If you do not name your heirs on your IRA retirement accounts, then probate court will attach them to your estate, leaving it vulnerable to creditors. Not naming your loved ones as beneficiaries on your IRA accounts can also cheat them out the tax benefits and their inheritances. 

Here is a brief overview on how you can protect your retirement accounts for your heirs. 

Establish priorities 

Think about who you want to inherit your IRAs and how much you want them to receive. If you have more than one child or beneficiary, consider leaving them equal distributions to keep your children from fighting amongst themselves. When naming beneficiaries for multiple IRA accounts, you should fill out a separate beneficiary form for each one. 

According to, if you do not create IRA trusts, as long as your heirs follow the IRS’ required minimum distribution rules, they can use the funds any way they want. If you want your beneficiaries to use their inheritances wisely, you should consider creating trusts for each of them, naming your heirs as the beneficiaries of those trusts and making those trusts the beneficiaries on your IRA accounts. 

Name alternative heirs 

Sometimes an original heir may choose not to accept an inheritance. They may want another person or organization to benefit and decide to give up their claim to it. If you do not have another beneficiary listed, then the account passes directly to a living spouse and then to your estate, or it may pass directly to your estate. An IRA is distributed according to the custodian’s default rules. To keep confusion down and prevent fights and disputes, you should name alternate heirs for your IRA retirement accounts. 

Because matters involving trusts, IRAs, estates and beneficiaries are complicated, you should take your time to learn and review your options. You should also seek out professional assistance to avoid making mistakes that can impact the legacy you leave behind to your loved ones.