Q: Naming a Minor as a Beneficiary on an IRA Account?
Would it be sufficient to have the following in the beneficiary section of the IRA documents: ______________ (guardian) as guardian for the benefit of ____________ (my child)..?
I currently have a revocable living trust for the purpose of leaving life insurance proceeds to said minor child, but I didn't want to name the trust as beneficiary of the IRA due to tax implications. If something should happen to me before my child (now 13) is an adult, the amount in the IRA doesn't warrant setting up any type of IRA trust.
Thank you for your advice!
A: I understand your predicament from a tax standpoint, but I would leave out the guardian designation. A minor, by definition, will have his/her assets controlled by a parent or legal guardian. The trouble, of course, is that he/she can get her hands on the IRA proceeds upon reaching the age 18.
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