Namiing beneficiary so as to allow disclaiming
I am 69 and have a ROTH IRA converted from a 403b plan. Upon my death I would like to give my wife the option of (partially or totally) disclaiming it with any disclaimed portion going to our two children. Would listing my spouse as sole primary beneficiary and listing the secondary beneficiary as “my descendents per Stirpes” accomplish that? And if it does, then could either of our children also disclaim leaving their children (our grandchildren) as at least partial beneficiaries with the ability to stretch?
Permalink Submitted by Bruce Steiner on Sun, 2008-07-06 01:54
You can do that if you want (except you should use the correct spelling of “descendants”), though you may want to discuss with the attorney who handles your estate planning whether he/she thinks it’s best given your situation and your objectives.
You might also consider providing for your children and grandchildren in trust rather than outright, to keep their inheritances out of their estates, and to better protect their inheritances against their potential creditors (including spouses).
Permalink Submitted by Charles Saylor on Sun, 2008-07-06 04:27
Thank you for your reply. Outside of a pension, social security and a modest ROTH IRA, at this time we have little in assets to put into a trust; so I just wanted to make sure those beneficiary designations (correctly spelled) would meet all the requirements necessary to allow disclaiming and stretching if so desired at some time in the future.
Permalink Submitted by Bruce Steiner on Sun, 2008-07-06 15:18
You don’t “put” your assets in a trust. The provisions of your Will (whether you provide for your children outright or in trust) take effect at your death.
Permalink Submitted by Charles Saylor on Sun, 2008-07-06 18:28
Poorly worded on my part–meant few assets at this time to justify the expense of a trust. Again, thanks.
Permalink Submitted by Bruce Steiner on Sun, 2008-07-06 18:32
You don’t need a separate trust instrument. The trusts can be under your Will.
I agree, though, that there is some level of assets below which it generally does not make sense to set up trusts absent unusual circumstances.