I am considering a Roth IRA. I want to make sure that I can designate anyone I choose as a beneficiary in the event I die. The person I would like to designate is not married to me nor related to me. Is there any problem with this?

You have the legal ability to name anyone you want, especially if you are not married. However, since state laws vary, you may want to check with a local attorney to make sure you do it in a way that cannot be challenged by your relatives.

Let me add a few points to Barry's good comments.....

You have the option to elect primary and secondary beneficiaries. This presents an opportunity to build in a "switch" into your estate plans. The primary beneficiary can decline to receive the assets which then "toggles" the assets to the secondary beneficiaries. Example: A couple in their 50s with two grown children designate the other spouse as primary beneficiary. In each case the two grown children are listed as 50/50% secondary beneficiaries. Ten years later one spouse dies. The surviving spouse may elect to take the assets.... or perhaps because they don't expect to need the funds or to reduce the size of the estate at the second death, might decline to receive the assets. The funds then revert to the two children. The "switch" is left in the hands of the surviving spouse.

I believe that the surviving spouse can decline all or part of the assets, but I have never heard of a partial case.

Taxpayers should periodically check that their IRA/Roths have beneficiaries designated. ESPECIALLY, after your transfer custodians or if your custodian is acquired/merges with another firm.


[This marks my 1,000th message at the Roth/IRA message board. I have enjoyed the opportunity to talk about general investment issues, wealth building and "planning". We are plunging into a great debate about the future of social security. This message board hopefully encourages folks to control their financial affairs and use the vast array of investment vehicles (stocks, bonds, mutual funds, etc.) to assure a positive future. Those that start early and stick to their plan may never look at social security as their primary retirement income.]

You should avoid a direct payment to a minor under 18 becuase of the need for a guardian to be appointed before payament can be made. The beneficary designation should permit payment to a person who is qualfied to act as the guardian of a child or the custodial parent to hold in trust.

If you live in a community or marital property state, you must obtain the consent of your spouse, if your spouse is not your sole primary beneficiary. These states are: Arizona, Alaska (if the spouses so elect), California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Some require the consent to be notarized


Congrats John G. I always look forward to your insightful posts-

I forgot to mention that beneficiary designations can be changed. It usually just requires a one page form.

For changing the beneficiary, which states require a notarized agreement with the spouse, which states don't?