Successor IRA Beneficiaries

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General

The final IRA required distribution regulations prohibit anyone from changing the beneficiaries of an account after the death of the owner. The IRS states that the naming of successor beneficiaries is not prohibited.

A successor beneficiary is an individual named to receive the remaining account balance of a primary or contingent beneficiary.

Successor Beneficiary Designations

A successor beneficiary can be named by the accountholder before death or by a beneficiary after death of the owner. A subsequent beneficiary can also be named under the terms of an plan agreement.

Nothing in the regulations prohibits a successor beneficiary from naming another successor beneficiary.

Most forms vendors sell forms for naming successor beneficiaries. If you don’t have a form the successor beneficiary designator can provide the designation in a letter to the custodian or trustee.

Successor beneficiaries can be named at any time by a beneficiary. The best time is the minute the account is inherited.

Lifetime Distribution Rules

Successor beneficiaries cannot extend the life of required distributions--they can only use the remaining life expectancy of the designated beneficiary.

Successor beneficiaries are ignored for purposes of determining designated beneficiaries and for purposes of the shortest life expectancy test.

Successor beneficiaries can accelerate the distributions which were being taken by the designated beneficiary, to include taking a total distribution


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