Why is an IRA rollover a more favorable planning option over naming the spouse as a beneficiary of the IRA Trust?

ira-rollover-vs-spouse-as-beneficiary-of-ira-trustQ: Why is an IRA rollover a more favorable planning option over naming the spouse as a beneficiary of the IRA Trust?

A: Generally, the rollover option is more favorable because of the following reasons:

1. Spouse may defer first RMDs until age 70½
2. RMDs are smaller, utilizing the Uniform Distribution Table rather than the Inherited IRA Table
3. Spouse can make changes to beneficiaries
4. Beneficiaries can use own life expectancies for RMDs when they inherit from spouse

These benefits are lost when IRA goes into a trust for the spouse. The main benefit to naming a spouse as trust beneficiary would be to control ultimate distribution of the IRA following the spouse’s death, such as in a blended marriage situation. The surviving spouse would not be able to change the beneficiaries and if the IRA owner wants to ensure that his or her IRA will be passed along to his or her own children (and not the spouse’s or whomever the surviving spouse may name as beneficiary).

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