Retirement accounts are a great way to plan for the future. If you are like most people, you have been saving assets for the future when you will need to draw on them.

If you were wise about your investments and frugal with your money, you might find that there may be a large amount left over when you are gone. You may also see this as a great opportunity to pass this nest egg on to a loved one that can use it for their future, even if you are no longer there to enjoy it with them.

The problem is, once you pass your retirement account on to someone else, all of the protections are gone from the account. What does this mean and how can the money be lost?

The Money is Misspent

If the money is not properly protected then it is possible that the beneficiary that you leave it to simply misspends the money. Maybe they are not as financially savvy as you are. Maybe they really like to buy things that they don’t need. Perhaps they are poor investors. Whatever the reasons, the money that is in your retirement accounts will no longer be protected once you pass the account on. This means the nest egg for the future can become a really great trip to Las Vegas, then it’s gone.

Your Beneficiary has Legal Issues

Whether it is their own fault or not, some people get into legal trouble that puts assets at risk. Whether it is because of a divorce, a bad business or even a liability lawsuit doesn’t matter. Once the retirement account passes from you to them, it becomes fair game in any legal actions that are being taken against your beneficiary. Any protections that money had when it was yours are now gone and it can be taken away by a court of law.

There is a Very Large Sum of Money in Your Accounts

It is entirely possible that, due to timely investments, wise savings and spending, that you have a rather large sum of money in your retirement accounts.You may not be comfortable handing such a large sum over at once and want to protect that money to be used over time.

To Avoid Disinheriting

Your new spouse may not have the same connection with your children from a previous marriage that you do. This could lead to your current spouse intentionally (or even unintentionally) disinheriting your children after you are gone. There are legal methods that will allow you to provide for your current spouse and after, when they are gone, let the balance of the account pass on to your children.

Trust the Elder Law Attorneys at Stano Law Group to Help

One method that can be used to protect these assets is to have them placed into a trust. If you need assistance with the right way to protect your retirement accounts, contact Stano Law group today.