While the primary purpose of retirement fund assets is to provide a source of income during retirement, in many cases substantial balances remain after the deaths of both the retiree and the retiree’s spouse. When left to family members or friends, these gifts can be subject to considerable taxes including estate tax and federal and state income taxes. If PRASAD is named as the beneficiary or contingent beneficiary of all or a specified percentage of your plan, both income and estate taxes are avoided.
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