Do Your Clients Understand the Implications of Naming a Minor as an IRA Beneficiary?

Naming a minor as the beneficiary of an IRA can be a tricky process. Minors are not legally able to enter into financial transactions. That means it can also be important to name a guardian who can make those important financial decisions until the minor has reached the age of majority. Custodial accounts can also be used to allow the minor to inherit the retirement funds, and the custodian of that account can be named as IRA beneficiary. If the account owner names a trust for the benefit of the child as beneficiary, it's important to remember that the "see-through" trust rules that applied prior to the SECURE Act continue to apply today--so it's important that the trust satisfies the test for a see-through or look-through trust. For more information on the rules governing eligible designated beneficiary account distributions post-SECURE Act, visit Tax Facts Online. : Q .