Should An Estate Ever Be Listed As An IRA Beneficiary?

You have the opportunity to decide several different options for naming an IRA beneficiary. You’ll want to establish what is most applicable in your situation and what is most appropriate given potential tax and other consequences. Your wealth is typically passed on through beneficiary forms filed directly with the IRA company. With an IRA, you have two main options.

The first is to name multiple beneficiaries to receive income out of your IRA distributions, or a single beneficiary to receive those assets or you can leave your estate as the beneficiary of your IRA. If the estate is named the beneficiary, assets are distributed to the estate, and then those heirs included in your estate will receive them, typically based on your previous planning.

If you’re not sure which avenue to take, consider speaking with a financial advisor, or an estate planning lawyer who can help you. Since you’re able to make any person a beneficiary of your IRA, many people don’t also know that they could name a business or a trust. Although you may not need to pick an actual beneficiary when your IRA serves as the beneficiary directly, this is rarely the right decision. When your money in your IRA becomes part of your will to be probated through your estate, it can also go through the extensive court process. This means that it may not be distributed as you wished and could take longer.

Furthermore, most IRA management companies go directly to the beneficiary designation form. This makes it easy for someone named as your beneficiary to receive those funds quickly and effectively. Set aside a time to meet with a qualified estate planning lawyer to learn more. At our Plymouth, MI law office you can discuss all aspects of your intended estate plan.



Tags: No tags

Comments are closed.