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IRA Inheritance Options

Deciding who should inherit your retirement account is an important part of estate planning. You have several options that are available.

When many people pass away, they will still have a lot of money in their individual retirement accounts for a beneficiary to inherit. It is important to decide who that beneficiary will be, in a way that fits your overall estate plan.

Options include:

· Spouse - If your spouse is the beneficiary, he or she can roll your IRA into their own. However, it might not make sense to designate a spouse, if they are nearing the age of having to take required minimum distributions and will not need the money.

· Child or Grandchild - If they inherit the IRA, then they can stretch the benefits out over their own lifetimes. However, as a practical matter, few do so because they need the money.

· Charity - Your estate can get a tax deduction, if you leave your IRA to a charity. It can be complicated, so get expert advice before filing out a beneficiary designation form.

· Your estate - There is not much benefit to naming your estate as the beneficiary. However, if you cannot decide on another option, you can do so.

· A trust - Ordinarily, there is no benefit to leaving your IRA to a trust. However, if the beneficiary would otherwise be a minor child or unable to manage their finances, it might be necessary to do so.

Reference: Morningstar (March 2, 2018) "Who Should Inherit Your IRA?"

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