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Is All the Paperwork Necessary?

Is all the paperwork necessary? Unfortunately, the answer is yes. Watch this week's Arista Advice to learn of a cautionary tale which can teach all of us.

Full Transcript: 

Hello, welcome to Arista Advice. Hope you're well. 

Question of the week is: "Paul, is all the paperwork necessary?" And the answer is, unfortunately, yes.

A recent court case has emphasized the importance of paperwork and beneficiaries. Mr. Crout was an employee of Kinder Morgan, and he participated in the Kinder Morgan 401(k) plan until his sudden and unexpected death in 2016. 

The primary issue was that the Crout children and Mrs. Crout were at odds as who should get the money. There was no beneficiary listed on the 401(k). Plan participants can designate who the beneficiary is, but they must fill out the proper paperwork to have the proper beneficiary designated if something happens. 

The children argued that the state probate court had jurisdiction and Mrs. Crout's marriage to Mr. Crout was invalid. Well, the court's decision denied the children's motion, stating the plan wasn't subject to probate, but it was subject to ERISA, the Employee Retirement Income Security Act of 1974.

The takeaway? Make sure your beneficiaries are up to date in your IRAs, Roth IRAs, your trusts, your wills, your 401(k), and always speak with your estate attorneys and financial advisors. Make sure things are where they need to be to honor your wishes and desires.

Please go to our website at AristaWealth.com to get more tools and tips and videos to learn and to become better informed. Have a great day.