Sign up for our FREE Monthly Email Newsletter
In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.
4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.
Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.
Estate planning can give you control over what happens to your wealth after you pass away. In some cases, an individual doesn’t designate a person as his or her beneficiary. Depending on the specific situation, this can have different effects on how the finances are distributed.
What if you don’t designate a beneficiary at all?
If you never designated a beneficiary, then most states will immediately distribute your IRA value to your spouse. Some states, including California, Nevada, Washington, and Wisconsin, require notarization so that the spouse can receive benefits. If the deceased is not married, the situation can get a bit more complicated. Unless otherwise noted, most states will next pass the estate on to dependent children, then dependent parents, then non-dependent children, and, finally, non-dependent parents.
If there are no children, no spouse and no parents, the money would go to the “Estate of the Deceased,” at which point the court would decide who the beneficiary would be. While this is not typical, in my experience the recipient has usually been a relative when there is no spouse or children to receive the money—but every state is different.
What if you designate an organization as your beneficiary?
Not everyone chooses to designate a person as the beneficiary of an estate. Instead, many people name non-profit organizations as beneficiaries. This lets them give back to the community with a final donation. This option is especially popular with people who either have no family or who feel that their family members do not need money from the estate.
When you name a non-profit organization as a beneficiary, the group doesn’t have to pay any taxes on what it receives. That’s a huge boon to non-profit organizations that desperately need money to improve their communities.
What if you designate a trust as your beneficiary?
If you have an IRA, then you can designate a trust as your beneficiary. This works well for those who want to support family members or friends without giving the money directly to them. It also reduces the amount of taxes the recipients will have to pay.
You can also choose to create a special needs trust. If you have a loved one with a significant medical problem, then it often makes sense to create a trust instead of leaving the money to him or her.
When you create a trust, the recipient has no control over the funds; the money is used to pay certain bills. That means the trust does not add to the person’s annual income. If you were to leave money directly to the recipient, the inheritance could interfere with government-funded assistance and programs, such as Social Security’s Supplemental Security Income (SSI) or government-subsidized housing.
Estate planning can seem complicated. Indeed, you have plenty of options when planning where your wealth will go after you die. Consider whether to name a beneficiary (or beneficiaries) and to make sure that you complete the proper paperwork so that these people or organizations will receive a percentage of your estate.
If you don’t name your beneficiaries, then legal battles could drag your family through a painful ordeal.
The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.