May a Surviving Spouse Establish Three Separate Spousal IRAs Following

[Guest Edward McElroy]

A surviving spouse was the beneficiary of her deceased husband's account balances in several qualified plans. Norwally the surving spouse would establish a spousal IRA naming her revocable trust as beneficiary. Instead, can the spouse establish three separate spousal IRAs, naming one of her three childen as beneficiary thereof? This might increase the payout period. Any thoughts? Thanks. Ed

[Guest Harry O]

Why do you think this might be a problem?

[BPickerCPA]

Actually, naming your revocable trust as your IRA beneficiary is a bad move. Naming the individuals is a much better idea.

[Dave Baker]

The plan probably won't make three distributions, but if the surviving spouse takes the account balance and opens one IRA then there's nothing to stop him or her from rolling over a piece of that IRA into each of two other IRAs ... (or, better, a direct transfer from the first IRA into each of the others) ... no limit on the number of IRAs he or she can have.

[Guest Gary Tencer]

Setting up 3 IRA's will not increase the payout period while Mom is alive.

You must use the MDIB table which assumes a 10 year younger beneficiary. After death of Mom, you would look to the life expectancy of the oldest child for the payout period. If there is little age difference between children, 3 accounts are extra BS without any benefit. After Mom's death the 3 kids can split the IRA, and go there seperate ways as long as they use the life expectency of the oldest kid.

------------------

[Guest M Becks]

Absolutely 3 seperate accounts would be preferrably. When 701/2 distributions are necessary, it will not make a material difference because of the MDIB rules, however it may make a sustanital difference when they inherit depending on their individual ages. If proper election made, children can use their live expectency to continue minimal disstributions and hence minimize tax impact. Regarding the use of trust, make certain trust qualifies,but if qualifies, will cause distributions based on age of eldest, unless 3 seperate trust. Same issue as if one ira vs three.