IRA AND ROTH IRA

Submitted by gautam shah on Fri, 2024-02-02 12:03

I have both accounts what is best way to pass to my children when i pass away to them. they are in multiple accounts with differant institutes. who are better custodian to deal easy bank insurance companyor charls swab



Submitted by Alan - IRA critic on Fri, 2024-02-02 16:19

Schwab would be much better to deal with than the average bank or insurance company. You would normally name your children as direct beneficiaries unless they are disabled, have exposures to excessive spending or creditors along with a significant account balance. Once your health begins to decline, you might consider consolidating these IRAs into fewer accounts and to take your RMD earlier in the year so your beneficiaries do not have to determine and complete your year of death RMD.



Submitted by Bruce Steiner on Mon, 2024-02-05 21:42

  • Schwab is fine.  Vanguard and Fidelity are also fine.  All three have low cost diversified mutual funds and ETFs.
  • Bruce Steiner


Submitted by gautam shah on Mon, 2024-02-05 21:52

thank you Allen and Bruce. can you clarify i am thinking by naming my son as primary beneficiary when i pass away his 10 year withdrawal kicks in. if he does not withdraw on 9th year files disclaimer my original subsequant beneficiary is my grandson what is time frame for he to withdraw total amount? how account should be titled? other question if i name my living trust as beneficiary IRS  may want to liquidate account as trust is not living person?



Submitted by Alan - IRA critic on Mon, 2024-02-05 22:21

  • The disclaimer must be filed within 9 months of your death, not 9 years, and also before your son takes any distributions other than your year of death RMD. If so, then your contingent beneficiary will inherit the IRA. If son does not disclaim, he must name his own beneficiaries as the contingent beneficiary you named is void if son is living and does not disclaim. Either your son or grandson would be subject to the 10 year rule unless they are disabled or chronically ill. IRA custodians vary slightly in beneficiary IRA titling procedures, but they are all OK with the IRS. 
  • If you name a trust as IRA beneficiary, it must be qualified for look through or it gets treated like an estate for RMD purposes (5 year rule for Roth IRAs or TIRAs if you pass prior to RBD, and your remaining LE if you pass after RBD for your IRA). For qualified trusts, the 10 year rule applies in most cases.


Submitted by gautam shah on Mon, 2024-02-05 21:53

follow up can either of you draft appropriate beneficiary designation document and or trust for fee?



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