How to: Designate TMI as beneficiary

How to designate TMI as the owner and/or beneficiary of a life insurance policy or a qualified retirement plan (IRA, 401(k), 403(b), SEP, or other similar plan)

1. Secure a beneficiary designation form from a representative of the insurance company or the manager of your retirement plan.
   
   
2. Name TMI as a beneficiary of the policy or plan (if you are changing beneficiaries only, you can name TMI as the beneficiary of a percentage of the assets or as a 100% beneficiary).  You also retain the right to change beneficiaries in the future.
   
   
3. If you name TMI as the owner of a life insurance policy, you can do so on the same form (or on an accompanying form if the company requires it).
   
   
4. If you name TMI as the owner of a life insurance policy, you receive an income tax deduction for approximately the cash value of the policy.  You will need a third party appraisal to determine the exact deduction value.
   
   
5. TMI will send you an acknowledgement and receipt for the gift.  
   
   
6. At the end of your lifetime, you know that TMI will receive a direct benefit without the costly delays of probate.

IMPORTANT HINT:
Unless you are over 72 and are rolling over a gift directly from your IRA to TMI, retirement plan assets may not make a tax-wise gift during your lifetime since they will generate an income tax liability to you, although giving retirement assets that you withdraw from your plan will generate an off-setting income tax deduction for you.  If you designate TMI as the beneficiary of your retirement plan after your death, however, your estate will avoid both income and estate taxes, if any are owed.