Can a child be the primary beneficiary of an IRA?
Name children in any of these ways as “Contingent beneficiaries;” for example, you may want to name your spouse as the primary beneficiary, but if your spouse passes away before your IRA is transferred, then the assets would go to your children.
Who are the beneficiaries of an IRA if Sarah dies?
Sarah was the original IRA owner and Amy, Melissa, Peter, Michelle, and Luke are primary beneficiaries—each designated a different percentage: Amy 15%, Melissa 5%, Peter 5%, Michelle 40%, and Luke 35%. This year, Luke died in April and Sarah died in May.
How many beneficiaries can I have for IRA account?
That 10-year rule gives your son (and other nonspouse beneficiaries) good tax planning flexibility during those 10 years after death. There are no annual RMDs for your son during any of the 10 years after your death, except that whatever the balance is at the end of the 10 years must be withdrawn.
When does a beneficiary of an inherited IRA have to be withdrawn?
The 10-year rule will mostly apply to nonspouse beneficiaries, like your son. Under that rule, the entire inherited IRA (or Roth IRA) must be withdrawn by the end of the 10th year after death, but the distribution will likely be income tax free, since this is a Roth IRA.
Name children in any of these ways as “Contingent beneficiaries;” for example, you may want to name your spouse as the primary beneficiary, but if your spouse passes away before your IRA is transferred, then the assets would go to your children.
When do you have to name a beneficiary for an inherited IRA?
You may designate your own beneficiary. The assets are transferred into an Inherited IRA held in your name. At any time up until 12/31 of the fifth year after the year in which the account holder died, at which point all assets need to be fully distributed.
How old do you have to be to be a direct beneficiary of an IRA?
If you name minor children or grandchildren as direct beneficiaries, then in your will you need to name a guardian to manage the funds on their behalf until they reach the age of majority (18 or 21, depending on the state.)
That 10-year rule gives your son (and other nonspouse beneficiaries) good tax planning flexibility during those 10 years after death. There are no annual RMDs for your son during any of the 10 years after your death, except that whatever the balance is at the end of the 10 years must be withdrawn.