IRA Dilemma

Submitted by graham rowe on Thu, 2014-10-09 19:54

My wife and I each have regular IRA’s. Mine is 7 figures and hers is 6 figures. I am 77, my wife is 59. For both of us it is a second marriage. We are each other’s primary beneficiary. Her contingents are four nephews and nieces. My contingent is my daughter. Upon my passing, I do not want my IRA rolled into hers for obvious contingent differences.

Is there a way to set things up to honor my concerns? I have a separate trust allowing my wife to access not only income but principal if necessary to provide for her health and well-being. She is in complete agreement with my concerns and wishes.

Any solution?

Thank you.



Submitted by mk foss on Thu, 2014-10-09 20:34

This is a difficult problem that occurs in second marriages. I can think of two possibilities:

  1. Name a QTIP Trust for your spouse instead of naming her directly. This way she will have income for her lifetime but will be unable to change the ultimate beneficiary. You could provide limited access to principal under specified circumstances as well. Since your wife may be close in age to your daughter, it’s possible that all of the IRA would be disbursed during her lifetime.
  2. Name your daughter as direct beneficiary for a portion of your IRA now. She’ll be able to use her life expectancy for distributions and will not need to wait for her stepmother to pass away. If your wife is named directly, it’s possible that after your death someone would persuade her to change the beneficiary to  someone other than your daughter.

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