Defining designated beneficiary on IRA
I have read in Mr. Slott’s book the info that a designated beneficiary must be a person . On a vanguard form there is an option “To my descendants who survive me, per stirpes”. While this does not name a specific person, it will point to one and saves the necessity of changing the form each time a birth/death, name change, etc occurs. Does this specifically meet the requirements of having a designated beneficiary or would it be better to specify actual names?
Jim Busick
Permalink Submitted by Alan Spross on Tue, 2009-11-03 23:17
Jim,
Yes, “per stirpes” DOES meet the definition of a designated beneficiary. However, that does not mean that IRA custodians like it, and some will not accept that format. I am somewhat surprised than Vanguard does because they have been restrictive in the past with customized beneficiary designations. If there will be an executor or trustee in this case, they may end up with a massive amount of documentation before Vanguard agrees to create separate accounts for beneficiaries. They obviously do not want to get involved in any litigation if a beneficiary is missed in the process.