Inherited IRA - Naming Beneficiaries - Ed Slott and Company, LLC

Submitted by Glenn Hammill on Wed, 2015-06-17 19:17

I have a client where the deceased Dad has a tradition IRA and names daughter primary beneficiary and granddaughter contingent beneficiary. Dad dies. Custodian and daughter retitled IRA showing it is an “Inherited IRA”. Since one of the rules of an inherited IRA is that the title shows the decedents name and the beneficiary, would daughter put herself as primary beneficiary still? Can she change the contingent beneficiary to a different person than what her dad had?
I went to Natalie Choate’s book on the subject and do not see that answer so I am hoping one of you can help.

SAME CLIENT DIFFERENT IRA: Dad also had a Roth IRA where the daughter was the primary beneficiary and there was no contingent beneficiary. Can the daughter choose who will be the contingent beneficiary? (Husband and/or granddaughter?)

Thanks,

Glenn

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Permalink Submitted by Alan - IRA critic on Wed, 2015-06-17 20:35

Custodians may have their own preferences whether the name of the decedent or the beneficiary appears first in the inherited IRA title. The IRS is OK with either order. Upon death of the owner and acceptance of the IRA by the beneficiary, the original contingent beneficiary is voided. The daughter needs to list her own successor beneficiary and contingent beneficiary on her inherited IRA and neither has to include the contingent beneficiary her father selected.
For the inherited Roth IRA (she will now have RMDs as a non spouse beneficiary), again she name name her own successor beneficiary with or without a contingent beneficiary. Both are her choice as is the case above.