Most of the time we are telling you how important it is to check IRA beneficiary forms to be sure they reflect your current planning objectives – such as the stretch IRA. It is also important to check the IRA agreement or an employer’s summary plan description (SPD) for the plan.
You're allowed to name anyone as the beneficiary of your IRA. You’re also allowed to name a non-person as your IRA beneficiary. Examples of non-persons would include charities, a trust, or your estate. It is generally not a good move to name your estate as your IRA beneficiary.
What are the rules when you inherit an inherited IRA? We get this question frequently. Let’s consider what happens when using designated beneficiaries.
Multiple beneficiaries exist when an individual names more than one beneficiary for their IRA. When you want your IRA assets to go to more than one person or entity without having to incur additional fees or paperwork by maintaining separate accounts for each beneficiary.
An RMD is the minimum amount that must be withdrawn from a retirement account each year. Traditional IRA owners are subject to RMDs beginning in the year in which they turn 70 ½. Beneficiaries of IRAs and/or Roth IRAs are subject to RMDs beginning in the year after the year of the IRA (or Roth IRA) account owner’s death.
A QCD is a distribution from an IRA that goes directly to a qualifying charity and is not included in the taxable income of the IRA owner. A QCD cannot be made from an employer plan. A QCD can be up to $100,000 per year, per individual.