If you have an IRA, the rules are different. The spousal rules under ERISA don’t control IRAs and the Tax Code doesn’t require you to name your spouse as the beneficiary of your IRA. So, in general, you can name anyone as the IRA beneficiary without having to get your spouse’s permission.
Who is the beneficiary of an IRA when you die?
When you establish your IRA, you have the opportunity to designate beneficiaries – -people who will receive the funds in your account after you pass away. And most married people name their spouse as beneficiary. But what if you and your spouse pass away in a common accident?
Can a spouse of the original owner inherit an IRA?
Anyone can inherit an IRA, but the rules on how you must treat it differ depending on whether you’re the spouse of the original owner or someone else entirely. However, a few exceptions to this …
What are the pros and cons of naming your spouse as your beneficiary?
Pros of Naming a Spouse as Your IRA Beneficiary. Your spouse is the only person who can inherit your IRA and treat it as if it is their own IRA. The advantage to your spouse if they are named as your primary beneficiary is flexibility upon your death in how they treat the IRA.
If you have an IRA and want your spouse to be its beneficiary, you have to specifically name the spouse as a beneficiary. If you have a 401(k) and want your spouse to be the beneficiary, you should still fill out a beneficiary designation form, naming your spouse.
What happens to the value of an IRA when a spouse dies?
The entire fair market value of the IRA or 401 (k) would be included in the value of the deceased owner’s estate for estate tax purposes if the account was left to anyone other than a surviving spouse.
When to disclaim an IRA to a spouse?
This offers the advantage of delaying the bypass decision until the spouse stands to inherit the IRA. At that time, if the spouse feels it’s better for the kids to inherit it, the spouse can “disclaim” the IRA.
Can a surviving spouse treat an IRA account as a 401k?
A surviving spouse can continue to treat the account as the deceased spouse’s account.
