grandchild beneficiary of IRA
Can a surviving spouse name a grandchild as their IRA beneficiary and what are the rules if RMD’s are being taken? Thanks
Can a surviving spouse name a grandchild as their IRA beneficiary and what are the rules if RMD’s are being taken? Thanks
Permalink Submitted by mk foss on Tue, 2008-11-11 21:15
The surviving spouse can name a grandchild as IRA beneficiary. Naming a beneficiary does not change current RMDs.
If the surviving spouse is taking RMDs as a beneficiary of the deceased spouse’s IRA, the grandchild will receive RMDs after the current beneficiary’s death but there will not be an additional “stretch out”.
If the surviving spouse rolled benefits over into an IRA in her/his name, the grandchild-beneficiary will be able to use their own life expectancy once they inherit.
Permalink Submitted by Edward Czapor on Tue, 2008-11-11 23:11
There is another situation that would allow the grandchild to use their own life expectancy for an additional stretch even if the surviving spouse does not roll over to their own IRA, but chooses to remain a beneficiary. This is the case if the surviving spouse dies before the year the IRA owner would have reached age 701/2.
Permalink Submitted by Alan Spross on Tue, 2008-11-11 23:18
And is not the surviving spouse of a surviving spouse………:)
Permalink Submitted by Al Fry on Tue, 2008-11-11 23:37
And if the GC is a minor, a consideration would be to use the State’s UTMA/UGMA in the bene arrangement. This would save the expense of a guardianship/conservatorship being appointed.