Whether the beneficiary of an individual retirement account (IRA) can name a successor beneficiary (second generation beneficiary) is determined by the provisions of the IRA plan document. In the last few years, most IRA plan documents that did not allow this option have been amended to allow beneficiaries to designate a succession of beneficiaries. Check with your IRA custodian regarding its IRA plan document provisions. If your current IRA custodian does not allow this option, you may be allowed to transfer your inherited IRA to one that does.

The life expectancy of the first generation beneficiary is always used to compute post-death distributions. This rule applies to second and subsequent generations of beneficiaries. For instance, if your child was the beneficiary of your inherited IRA and the child later designated someone else as the beneficiary of the IRA he or she inherited from you, then you, your child and the person he or she designated as beneficiary would all use your life expectancy to calculate required minimum distribution (RMD) amounts. (For more information on retirement plans, see Introductory Tour Through Retirement Plans. For more on RMDs, see Avoiding RMD Pitfalls.)

This question was answered by Denise Appleby
(Contact Denise)

  1. How can I determine if a longevity annuity is right for me?

    A longevity annuity may be right for an individual if, based on his current health and a family history of longevity, he ... Read Full Answer >>
  2. How does a Roth IRA grow over time?

    Your Roth IRA account grows over time thanks to two funding sources: contributions and earnings. While your contributions ... Read Full Answer >>
  3. Can my 401(k) be seized or garnished?

    As long as your retirement funds are held in your 401(k) and you do not take them as distributions, your 401(k) cannot be ... Read Full Answer >>
  4. Can my IRA be taken in a lawsuit?

    Whether your IRA can be taken in a lawsuit depends largely on your state of residence and the judgment in question. There ... Read Full Answer >>
  5. Are mutual funds considered retirement accounts?

    Unlike a 401(k) or Individual Retirement Account (IRA), mutual funds are not classified as retirement accounts. Employers ... Read Full Answer >>
  6. Can my IRA be garnished for child support?

    Though some states protect IRA savings from garnishment of any kind, most states lift this exemption in cases where the account ... Read Full Answer >>
Related Articles
  1. Retirement

    10 Ways to Save Your Retirement: It's Not Too Late

    It's not too late to start saving for your retirement, even if you took longer to start thinking about it and doing something about it.
  2. Investing

    10 Ways to Effectively Save for the Future

    Savings is as crucial as ever, as we deal with life changes and our needs for the future. Here are some essential steps to get started, now.
  3. Professionals

    How to Protect Your Portfolio from a Market Crash

    Although market crashes are usually bad news for your portfolio, there are several ways to minimize losses or even profit outright from market movement.
  4. Retirement

    How Robo-Advisors Can Help You and Your Portfolio

    Robo-advisors can add a layer of affordable help and insight to most people's portfolio management efforts, especially as the market continues to mature.
  5. Professionals

    3 Benefits of Working Longer (and Retiring Later)

    There are many reasons why folks in their 60s may want to keep working until at least age 70. Here are three.
  6. Savings

    Passing Down Values and Money to the Next Generation

    Amassing wealth to pass down to your kids is great unless your values don't come with it. A priceless gift is teaching them to be financially responsible.
  7. Investing

    Estate Planning for Singles

    Now that singles dominate the population, it's important they understand the essentials of estate planning for indivdiuals.
  8. Retirement

    How Are 401(k) Withdrawals Taxed for Nonresidents?

    As a U.S. nonresident, deciding what to do with your 401(k) after you return home comes down to which tax penalties, if any, you're willing to incur.
  9. Retirement

    Why Are Annuities Important for Retirement?

    Understand how annuities work, and identify the benefits they provide for retirement, the most salient being a guaranteed income stream for life.
  10. Savings

    Become Your Own Financial Advisor

    If you have some financial know-how, you don’t have to hire someone to advise you on investments. This tutorial will help you set goals – and get started.
  1. Letter of Intent - LOI

    A document outlining the terms of an agreement before it is finalized. ...
  2. Qualified Longevity Annuity Contract

    A Qualified Longevity Annuity Contract (QLAC) is a deferred annuity ...
  3. Wealth Management

    A high-level professional service that combines financial/investment ...
  4. See-Through Trust

    A trust that is treated as the beneficiary of an individual retirement ...
  5. Settlor

    The entity that establishes a trust. The settlor also goes by ...
  6. Backdoor Roth IRA

    A method that taxpayers can use to place retirement savings in ...

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!