Naming Minor as IRA Beneficiary
We are encountering problems naming a custodian as beneficiary of an IRA for a minor at Charles Schwab. We used to custody at TD Ameritrade and it was not a problem to name an adult custodian as beneficiary for the minor but we seem unable to do this at Schwab. We don’t want to name a trust as beneficiary due to the unnecessary complications so we are not sure how to proceed when wanting to name a minor as beneficiary of an IRA. Any suggestions would be greatly appreciated!
Permalink Submitted by Alan - IRA critic on Fri, 2024-10-11 17:59
A minor cannot inherit an IRA, but you can name an UTMA account custodian as the beneficiary. You may have to call customer service to be directed to a knowledgeable rep.
Permalink Submitted by Jonathan Sard on Mon, 2024-10-14 13:41
Understood. My initial question may have been stated unclearly. We would always name an UTMA account custodian as beneficiary when we were with TD Ameritrade. For example, “Sally Jones as custodian for Bill Jones under UTMA of Georgia as beneficiary of my IRA”; however, we seem unable to do this at Schwab and I am not sure how to proceed or if you have any other suggestions. We don’t want to name a trust as beneficiary of IRAs if it can be avoided.
Permalink Submitted by Alan - IRA critic on Tue, 2024-10-15 11:02
I think this question for Schwab needs to be referred to a specialist, as front line reps are no longer able to handle the variety of questions that they used to. Client should request an IRA specialist to clarify how to name the UTMA beneficiary. There may be a special form to be completed, but it makes no sense that they simply would not allow a minor/UTMA to be designated as the beneficiary.