Should the beneficiary of an IRA be trust or the heirs
An IRA has designated beneficiaries.
An IRA requires a named beneficiary. If there are no beneficiaries named, it will be a part of the estate.
Spouse certainly not. Others possibly.
IRA stands for INDIVIDUAL Retirement Account. It must remain in the individual's name. An IRA cannot be transferred to a trust because a trustee is the legal owner of all the property transferred to a trust. Transferring an IRA to ownership by a trust would mean changing the name on the account and it would trigger a surrendering of the IRA and thus tax consequences. Trust law is extremely complicated. Trusts should be drafted by and the owners guided by a attorney who is an expert in trust law and tax law.
The IRA is usually treated seperately from the total Estate if there is no Power of Attorney on the documents so it's highly unlikely that the executor would get a percentage unless the heirs agree to it. * No. In the US, the executor or administrator of an estate is only entitled to the percentage allowed by the laws of the state probate court.
Yes. However, any amounts remaining in your IRA upon your death can be paid to your beneficiary or beneficiaries.
No, not unless directed to by a Court to do so.A person has a right to name -- and to exclude -- who will be beneficiaries. If I have 4 daughters, but only choose two for this role, then that is my stated wishes. The other 2 daughters have to respect what I wanted.No. An IRA with named beneficiaries does not come under the authority of the executor of the estate because it is not a probate asset. The trustee of the account will pay it directly to the named beneficiaries. That is the purpose of naming beneficiaries.
No. A trust cannot have an Individual Retirement Account.
The beneficiary form on an IRA is the first and most important part of receiving an inherited IRA," said Matthew Curfman, a senior vice president at Richmond Brothers Financial Management Specialists. "If you fail to name a beneficiary on your IRA it is highly likely that your beneficiaries will not be able to 'stretch' the inherited IRA over their life.
Yes, there is legal requirement for informing beneficiaries if you choose to withdraw money from your own IRA. The beneficiaries have no legal right to your money before you die. However, the legal system will allow anyone to sue anyone else for anything they like. Of course, all situations may be unique. If you are concerned about issue, recommend you consult with an attorney for legal advice.
A lot of people now choose to pass on a Roth IRA account to an heir. This allows the earnings of investments in a Roth IRA to dramatically increase over the years. If you want to provide an heir with the true "gift that keeps on giving," a Roth IRA is the perfect place to start. A Roth IRA allows people to enjoy incredible savings on their investments. Without a Roth IRA, stocks within an account would likely have to be taxed at a rate of 35%. This can cut out a lot of funds that were intended to be passed on to heirs.
Opinions on changing your standard IRA investment to a Roth IRA vary on who you ask. www.smartmoney.com/.../should-i-convert-my-ira-to-a-roth-ira is an excellent website for information.