Can You Name a Non-Individual or Entity?
Yes. Anyone or anything can generally be the beneficiary of
your retirement assets such as IRAs, 401(k)s and annuity contracts. For
example, an ailing client asked if he could name his trust as his IRA
beneficiary. Provided the IRA custodial agreement permits him to name entities,
yes, he may.
However the question becomes: does he really want to do
that? What the client failed to realize was that his wife and older brothers
were also named as trust beneficiaries. The IRS has made it very clear that
when a trust is the beneficiary of an IRA, the oldest trust beneficiary’s life
expectancy is the measuring life. Thus, his
Does It Matter Whether You Name A Spouse or Non-Spouse
Beneficiaries?
Yes. Spousal beneficiaries and non-spouse beneficiaries do
not have the same options when it comes to inheriting an IRA. For example, a
surviving spouse generally may elect to treat an inherited IRA from the
deceased spouse as his or her own or choose to rollover the IRA into their own
existing IRA. Non-spouse beneficiaries never have those options available.
Distribution options for non-spouse beneficiaries are far more limited under
IRS rules. IRA custodians also may limit distribution options for inherited
IRAs.
What Options Do Your Beneficiaries Have?
Does your custodian permit your heirs to use a
multigenerational IRA distribution strategy? This vital information will be
found in your custodial agreement and other custodial documents issued by your
financial institution such as amendments. If you are unsure or want to confirm
how your hard earned money will flow when you are gone, your retirement distribution
specialist can help you by conducting a Custodial Review. This is a
complimentary service that costs you nothing but can really pay off for your
heirs by thousands of dollars down the line.
No comments:
Post a Comment