Non- Spouse IRA Beneficiaries

Submitted by Steve Hagedorn on Wed, 2021-08-04 19:10

I have a SDIRA (roughly $100k today) that will serve a few purposes in retirement. Capital growth and Income.

I will take periodic annual withdrawals during my lifetime…think RMDs at 72.

Upon my death, I am considering that one of my beneficiaries be a non-spouse (life partner) as well as potentially my surviving adult children. I would like to primarily meet some of my life partner’s future living needs (expenses we share on a property we both own equally and she will continue living in until her death) .

I have other assets my children will be inheriting. My children will also split 50% of the sale of the property that my life partner and I own equally when she passes or sells the property.

Does a trust make sense to handle these dynamics (SDIRA and the Property)?
Does a non- spouse get to inherit a non-spouse’s IRA?
Could my children and my non-spouse inherit this IRA in some proportion (say 50%, 25%,25%)or amount ($100K to non-spouse, remaining split between children)?

I am using this is strategy in lieu of buying $100K term life insurance policy for my life partner benefit if I predecease her.

Thanks in advance for your replies.



Submitted by Alan - IRA critic on Wed, 2021-08-04 21:06

You can name multiple beneficiaries to your IRA on a % basis. Upon your death, each could create a separate inherited IRA of their own and they could name their own beneficiaries. If the life partner is not more than 10 years younger than you, she could stretch her share of the IRA, but the children will be subject to the 10 year rule unless they are disabled. However, the life partner is free to leave her portion of your IRA to anyone she wishes in this scenario, and since her share is likely to be well under 100k, the costs of leaving her share of the IRA to a trust that would provide this control likely does not make sense. 

Submitted by Steve Hagedorn on Thu, 2021-08-05 18:46

Just confirming the non spouse beneficiary need to be less than 10 years younger in order to “stretch” the inherited IRA over their lifetime. Is that correct?

Submitted by Alan - IRA critic on Thu, 2021-08-05 19:55

That would allow the stretch, but so would a being chronically ill or disabled as of the date of your death, or if a minor child of  yours, the 10 years would not kick in until the age of majority, extended to as late as 26 if the child was in a higher education program. But perhaps your children are beyond those ages.

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