Posted on September 07, 2005 at 16:57:27:
Who will get your IRA funds? Some people who have other sources of income take only their required minimum distribution. Some take the RMD and then spend more IRA money to live on. And some people die before taking out much at all. Who gets the rest?
If the primary beneficiary is a spouse and the money goes directly into his or her IRA, there’s no tax due until it is withdrawn. If she doesn’t need the money, she can disclaim, and the assets will pass to the secondary beneficiaries, perhaps the children. Grandchildren might be tertiary beneficiaries, in case the children disclaim. Even great-grandchildren can be listed. Each must be named individually. (If the custodian of the IRA does not provide an appropriate form, have a lawyer do it.)
What puts off the tax obligations the longest is leaving the funds to the youngest possible generation, who can then withdraw the money over their own lifetimes.