If you’ve saved up all your working life, via 401(k) and have enough money to be comfortable in your retirement, congratulations! But even if you are not quite there yet, you are still investing in your 401(k) each pay period, saving regularly and making maximum contributions. That means you’re still working toward being comfortable in your retirement, and when you’re older.

But beyond just saving your money for retirement, it’s important to make a plan for what happens to your money if you pass away before you retire.

Beneficiary Forms – Who Inherits Your Retirement Funds

In other words, you want a will. But beyond a general will, you’re going to need to make sure your investment beneficiary designations are correct and actually reflect the actions you want. A will doesn’t determine who inherits the 401(k) or IRA, and although it’s an important document, you really need your beneficiary forms to be updated and correct. If you make changes to your life, please remember you may need to update your information on your beneficiary forms.

Steps to Take if You have an IRA

If you have an IRA, such as the Self-Directed IRA, you need to make certain your designee forms are filled out and filed correctly. Your beneficiary then has options as to what they can do with the money. In some instances it makes more sense for them to accept required minimum distributions. In other cases it may make more sense to roll the IRA over. It can also sometimes be converted to a Roth IRA. Talk to your tax professional to see about these choices.

Related: Solo 401(k) Plan Distribution Rules

If you Have a 401(k)

With a 401(k) or Solo 401(k), your spouse will receive the money after your death. But you should still make sure you fill out a beneficiary form, and if you’ve divorced, note that the form must indicate this and that the new spouse should receive the funds. Where there is no spouse, the designated beneficiary will receive the funds, and have essentially the same options as for an IRA.

Estate taxes will play a part in whether you want to accept monies coming to you and are important to look into. Your estate lawyer or tax attorney can assist you with important decisions and information.

Federal and state income taxes are likely to affect your inheritors, regardless of who they are. So, it’s important to take these things into account when deciding on who your beneficiary/beneficiaries will be.

Planning for after you die makes some people uncomfortable, but it’s so much better to have a plan in advance rather than leaving things to be untangled by the courts and lawyers.