Best way to list Minor as Beneficiary on IRA
What is the best way to list a minor as beneficiary on an IRA?
Is there a downside to just naming minor as beneficiary directly as opposed to naming trust for the beneficiary?
What is the best way to list a minor as beneficiary on an IRA?
Is there a downside to just naming minor as beneficiary directly as opposed to naming trust for the beneficiary?
Permalink Submitted by Alan Spross on Tue, 2012-10-09 20:20
Check with the IRA custodian to determine what options they will accept. They may also be familiar with state law requirements.
Since the minor cannot deal directly with the IRA custodian, you could use a trust beneficiary for larger IRAs or name the custodian of an UTMA/UGMA account on behalf of the minor to receive distributions. With an UTMA beneficiary, the minor can claim full control of the account at the age of majority for the minor’s state.
If you only name the minor directly, most likely a court approved guardian will need to be appointed to handle the IRA until the minor reaches majority. This can be time consuming and expensive.
http://www.theslottreport.com/2012/04/minor-beneficiaries-q-and.html