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Feb 28 2011 12:00AM


Is a spouse the best beneficiary for an Individual Retirement Account (IRA) or could that be a problem?


FPA member Vincent R. Barbera, CFP® of TGS Financial Advisors, said the following:

“Depending on your estate planning intentions, a spouse may or not be the most appropriate designation. An IRA is a will substitute, which means that the assets pass on to your listed beneficiary outside of your will. If in your will, you have designated your spouse as beneficiary of your assets, then it may be appropriate to list your spouse as beneficiary on your IRA. Again, it comes down to your estate planning goals.

“If you have intentions of giving an inheritance to children or another individual who is not your spouse, you could directly benefit them by naming them as beneficiary on your IRA. It all comes down to how you intend your assets to be distributed and what your ultimate goals are upon your death.”

For his part, FPA member Donald A. McDade, CFP®, ChFC, CRPC, a Private Wealth Advisor, and Managing Advisor with Mosiac Consulting, offered the following advice: “Many people name their spouse as beneficiary of their IRA if they want their spouse to have the IRA at their death. It is also important to consider naming contingent beneficiaries as you and your spouse may die at the same time. There are instances where your estate or trust may be named, however it’s best to get personal planning advice from a financial planner that is familiar with your entire personal financial situation.”

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