Considerations When Naming an IRA Beneficiary

For most taxpayers, naming a spouse as their IRA beneficiary makes the most sense--as a spouse is entitled to treat those funds as their own and has more options regarding distribution choices.  However, if an IRA owner suspects that their spouse may be vulnerable to scams or already has sufficient assets, a different beneficiary could be advisable.  Trust options can protect a vulnerable spouse from bad actors--or address concerns that the surviving spouse may remarry and direct the funds to a new spouse rather than beneficiaries the deceased spouse may have chosen.  QTIP trusts, while complex, can address situations where an account owner wishes to provide a surviving spouse with income for life, yet leave the remaining IRA funds to children from a prior marriage.   For more information on the general tax rules governing post-SECURE Act elections for spouse beneficiaries, visit Tax Facts Online. Read More: Link to Q3903.01.