Children under age 5 inherit IRA
What happens when the primary bene is deceased and the contingent benes are grandchildren under 5. Who controls the money, can they stretch these payments, take in 5 years, lump sum, and who directs the money.
Cient does not want money to go to their children as the children are remarried and do not want the monies to go to the new spouse.
AT WHAT AGE DOES THE MONEY GO THE CHILD…WHAT AGE CAN THE CHILD MAKE THE DECISIONS. IS IT HELD UNTIL THE CHILD IS A CERTAIN AGE IF THE CHILD IS NAMED AS THE CONTINGENT AND THE PRIMARY IS DECEASED??
Permalink Submitted by Alan Spross on Fri, 2009-08-14 04:02
Generally state law determines who has control of a minor inherited IRA on behalf of the beneficiary. The RMD decision is made by this responsible party, and can include life expectancy or the 5 year rule if the IRA owner passed prior to the RBD. A total distribution might also be justifiable in certain cases.
If an IRA owner does not like the likely appointment of the parent or other financial guardian under state law, they could instead name a child’s trust as the beneficiary and name their own non family person as the trustee. They could also specify the distribution regimen in the trust.
Permalink Submitted by Bruce Steiner on Sun, 2009-08-16 03:28
Or if the amount is too small to warrant having to adminster a trust, the IRA owner could name any adult person as custodian for the minor under the Uniform Transfers to Minors Act as beneficiary.