Proper way to name spouse as primary beneficiary and trust as contingent
A husband is married with two minor kids. If the husband wanted to name his wife as primary beneficiary and trust as contingent beneficiary, would making the spouse a per stirpes beneficiary mess up his plan? My understanding is that it would as the per stirpes beneficiary would override the contingent beneficiary and the IRA would go directly to the kids if the wife predeceased the husband (and he does not revise the beneficiary designations).
So in this case would the best course of action be to name the wife as primary beneficiary (but not make it per stripes) and then the trust as contingent beneficiary?
Permalink Submitted by Alan - IRA critic on Wed, 2022-10-05 17:36
The beneficiary clause in the IRA agreement should be carefully checked. For example, Vanguard’s beneficiary designation clauses conforms to your conclusion that the per stirpes designation would trump the contingent beneficiary designation. In other words, the assets would only go to the contingent beneficiary if all per stirpes beneficiaries had pre deceased or disclaimed.