Designation of An IRA Beneficiary
Without a beneficiary statement, the default provision in the custodian-agreement will apply, which may be the estate of the owner resulting in higher taxes and extra fees.
- Identity
- A specific, identifiable individual must be designated as beneficiary.
- Contingent beneficiary
- If the primary beneficiary predeceases the IRA owner, the contingent beneficiary becomes the designated beneficiary. If a contingent beneficiary is not named, the default provision in the custodian-agreement applies.
- Death
- At the IRA owner's death, the primary beneficiary may select his or her own beneficiaries. There is no obligation to retain the contingent beneficiary designated by the IRA owner.
- Multiple accounts
- An IRA owner can split an IRA into several IRA's each with different beneficiaries, assets and value.
Read more about this topic: Estate Planning
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