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Don’t fail to pass it on if it’s not needed – the Self-Directed IRA Beneficiary Form

Many wealthier adult children forget they can disclaim an inherited IRA and pass it along to their children-possibly creating tax-deferred growth for decades, says Adam Bergman, tax attorney IRA Financial Group.

There are two things to keep in mind; First, the IRA or self-directed IRA owner has to fill out the beneficiary designation form in a way that will allow it. The best way is to leave the account “to my then-living descendants, per stripes,” which means the account goes equally to your children, or, if they have died, to their children. You must act quickly. Disclaimers must be completed within nine months of the benefactor’s death, Mr. Bergman said.

The tax attorneys at the IRA Financial Group will assist you in completing the Designated IRA Beneficiary Form. The Designated IRA Beneficiary form is crucial because it clearly outlines which individual or entity will be the beneficiary of the IRA holder’s IRA in the case of death. The IRA account is transferred tax-free to the beneficiary. If the IRA is transferred to a spouse, the spouse can change the IRA account name to his or her name or can leave the account in the name of the deceased spouse. If the IRA beneficiary is not a spouse, the IRA transferred becomes an inherited IRA, which is still tax-free, but includes some transfer restrictions (i.e. the IRA cannot be rolled into a 401(k) Plan).

The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP and Dewey & LeBoeuf LLP.

To learn more about the IRA Financial Group please visit our website at or call 800-472-0646.

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