Roth Ira beneficiary declaration
On my Roth Ira, I declared my primary beneficiary my wife and my secondary beneficairy my revocable trust. Since I have 5 children, I was told that this was the best declartion status for me. If my spouse dies or forgoes a claim to the Ira benefits, will my children be able to stretch out their Ira payments over their lifetimes? In the revocable trust, my children share equally in all proceeds from my estate.
Permalink Submitted by Bruce Steiner on Sun, 2010-06-20 03:06
It depends on the terms of the trust.
If you want your children to get the IRA outright, you could simply name them as the contingent beneficiaries.
If you want your children to get the IRA in separate trusts for their benefit, you could name trusts for their benefit as the contingent beneficiaries. Whether they could use their life expectancies (or the life expectancy of the oldest child) depends on the terms of the trusts.
For more on this, see my article on trusts as beneficiaries of retirement benefits in the March 2004 issue of the Estates, Gifts & Trusts Journal: http://www.kkwc.com/docs/AR20041209132954.pdf.