ROTH IRA BENES
I HAVE TEN ROTH ACCOUNTS THAT HAVE AS MY PRIMARY BENEFICIARIES MY ONLY TWO SONS. ALL OF THEM ARE SPLIT 50% BETWEEN THE BOTH OF THEM. WOULD IT BE BETTER TO HAVE FIVE OF THEM GO 100% TO ONE SON AND FIVE OF THEM TO GO 100% TO THE OTHER? THE ONLY PROBLEM WOULD BE TO KEEP THEM EQUAL.
Permalink Submitted by tomd37 on Sat, 2010-07-10 16:27
I would first ask why you have ten separate Roth IRA accounts. Is there a reason they are not combined into fewer accounts? ❓
Tom D.
Permalink Submitted by Alan Spross on Sat, 2010-07-10 17:44
The only advantage of splitting them up per beneficiary is to make sure that they do not fail to create separate accounts by the deadline after your death so that they can each use their own life expectancies. But creating separate accounts is a simple matter and there are ways to communicate that need to the them both now and later on.
Here are some of the downsides of creating the separate accounts now:
1) You will have even more accounts than you already do, and you already have more than you should unless there is a good reason that is not evident here
2) It will be a constant hassle to make sure every change is exactly duplicated if you want to keep them equal
3) If they inherit separate accounts, they will never know for sure IF the values are in fact equal
4) There is added risk that YOU could make an error at some point that would make them unequal
Therefore, it would generally be better to make it easy on yourself, consolidate the accounts and keep the beneficiaries the same on the accounts that remain. Then you will not have to worry about the 3 pitfalls above.
Permalink Submitted by Richard Partin on Sun, 2010-07-11 20:41
Thanks guys for the replies. My IRAS have gotten a little out of hand.