Charity as Beneficiary
We have a charity for a client. They were named as a beneficiary on an IRA.
The IRA custodian is making the charity open a beneficiary IRA account.
Is this standard practice now? Sounded odd to me since charities used to be just paid out.
Permalink Submitted by Alan - IRA critic on Fri, 2021-01-29 22:24
Yes, almost all IRA custodians will open an inherited IRA for each beneficiary (when they have sufficient info including death cert). The inherited IRA will show the beneficiary SSN or TIN. The distribution to the charity will come from this inherited IRA account. IRA custodian do not want more than one SSN/TIN on a single account, so this simplifies the accounting for them.