Benif. of RIRAS, spouse and kids
If I know that my wife will list, as the primary beni., my kids,( hers too, same kids)on my roths after I die, would it be better to list my wife as the primary and the kids secon. on my RIRAS, or (my wife can afford it) to list the kids as the primary and the wife as the second? Thanks for the help.
Permalink Submitted by Alan Spross on Sat, 2012-06-09 16:52
While it is difficult to predict circumstances under which your wife or kids would take Roth distributions if they inherited the Roth, if you eliminate all distributions other than RMDs, the Roth will last longer if you name your wife as primary. She can assume ownership and avoid RMDs but your kids must take RMDs if they inherit the Roth or part of it. Obviously, you would need to establish controls to make sure your wife remembered to name the kids ASAP after you passed to make sure the Roth does not go to her estate.
Depending on what Congress does about estate taxes at year end, if your combined estate is large enough to be subject to such taxes and if your wife cannot use your unused exemption as she could now, then your wife could save on estate taxes if you left the Roth to your kids. I would not worry about this now, but wait to see what Congress comes up with when the current provisions expire on 12/31.