An IRA Beneficiary Designation in Your Will Won't Work

To make a beneficiary designation for your IRA, you must file the information with your account provider instead of simply listing this in the will. This requirement is in place because not all individuals will receive the same distribution as a beneficiary on your account. Listing an individual in your will alone will not result in benefits.

IRA Distribution Regulations

If your spouse is your beneficiary, that spouse will have several options to receive your retirement account. For example, your spouse may simply combine your IRA with his or her own in many cases. The spouse may also choose between your life expectancy or his or her own when deciding a distribution plan after your death. Non-spouse beneficiaries have fewer options.

Listing a Beneficiary

Listing a beneficiary in your will is fine as a fail safe, but it is not enforceable as a rule. Instead, you must list the beneficiary on your account with your plan provider and with the IRS. Since the IRA is a unique tax-deferred account, the IRS must possess this information prior to your death in order to register and verify it. You can ask your plan provider how to list a beneficiary if this was not completed when you opened the account.

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