It is important to make careful choices when naming your IRA beneficiaries. At death, the people named as beneficiaries are entitled to receive the IRA assets. This is true without respect to any wishes expressed in your will or other documents.
You should also consider the whether you should name a trust or estate as beneficiary. Ed Slott in Financial Planning magazine points out that estates and trusts do not have a life expectancy.
Generally, it is not advisable to name your estate as a primary or contingent beneficiary because death distribution options will be limited when an estate inherits an IRA. This is because an estate does not have a life expectancy and thus cannot stretch death distributions over a long period of time.
If you wish a specific person to receive the assets held in an IRA, it is best to name that person as beneficiary or contingent beneficiary.
Questions about benefiary designations? Check with your attorney, financial advisor or send us an inquiry.