| Naming the estate as beneficiary of an IRA?
CLIENT QUESTION:
How are IRA withdrawals taken when left to the estate with non-spousal beneficiaries?
MY RESPONSE:
STOP! As an estate planning attorney, nothing gives me AGIDA more than a client naming their estate as beneficiary of their IRAs. When an estate is named beneficiary, the estate must take out the Required Minimum Distributions (RMDs) over a five-year period. Instead, if you name an individual or many trusts, then the individual or trust can usually take out RMDs over a 10-year period (and sometimes longer). Be careful when naming your beneficiaries of your retirement plans to maximize the payout, thereby deferring the tax, which is always a good thing.
By the way, most of my friends growing up were Italian! 😊 |
