A retirement account is something that you really need to understand when considering your will and your heirs, as it may be a large portion of your overall wealth. There are a few different ways in which it can be passed on, and your will typically does not decide what happens to the account.
Rather than using the will, you're usually just going to note who your beneficiaries are in the account itself. This could be your children, your spouse or anyone you choose. If you pass away, the transfer of funds happens directly, and a will can be used for other assets, like a home or a car.
Another option is to set up a trust. When you pass away, the individual retirement account is then used to create the trust, funding that account. The trust is aimed at specific heirs, who are then paid out of it accordingly.
One reason people do this is that the money can be released on a set schedule. For example, you may think that your son or daughter will burn through all of the money right away if the whole account just goes to them at once. With the trust, you can set things up so it pays out in any way that you desire. You could give them 10 percent of it every year, for 10 years. If you want this type of control, a trust is better than just turning it all over at one time.
Estate planning in New York can be complicated, which is why it's good to research all of your legal options well in advance.
Source: MarketWatch, "Why you should put your IRA in a trust," Kenneth Roberts, March. 27, 2015