Most likely, your retirement accounts are the largest assets you will leave your children. Since this money is taxed when you withdraw it, it is going to be the last money you spend. So at your death, it is very likely to be your largest asset.
When a retirement account is inherited by a beneficiary who is not your spouse, that beneficiary can take the account out over his or her lifetime. The problem is most beneficiaries do not realize that this tax benefit exists, and they make the mistake of withdrawing the entire account immediately. Also, be aware that once the account is no longer in your name or your spouse’s name, it is no longer protected against creditors and lawsuits. It is also vulnerable to being lost in a beneficiary’s divorce.
The better way to approach it is to place all of the retirement accounts in a Retirement Plan Trust, also known as an IRA Inheritance Trust™. This trust protects the retirement accounts from the beneficiary’s divorce, creditors, and lawsuits, and encourages the beneficiary to take it out over his or her lifetime.