When you set up your IRA, did you specify a beneficiary? Maybe even contingent beneficiaries in case the first beneficiary dies before you do? Most folks do; most custodians ask for it. But there’s a horror story to warn those who didn’t.

When an IRA owner does without a named beneficiary, the funds would be distributed according to a will. And if there isn’t a will, the money is distributed to those who would inherit under the laws of intestacy.

The IRA can be split among several people via a trustee-to-trustee transfer from the deceased owner’s IRA to a new IRA for each beneficiary, though these accounts must remain in the original owner’s name for the benefit of the new owner. Those new owners can choose to take as much as they want from their respective accounts, but all the money must come out by the end of the fifth year following the death of the original IRA owner.

For nearly 30 years, Mike Nickerson has owned and managed a small, full-service accounting practice in the Midcoast. He holds a bachelor's degree in accounting from University of Southern Main and a master's degree in financial planning from Bentley University.

He is a past board member and president of the Maine Society of Certified Public Accountants and currently serves on the Maine Board of Accountancy.

An aged rock musician, Nickerson now finds musical enjoyment playing upright and electric bass in a variety of bands spanning folk to jazz music genres. He and his wife have three grown children, and they enjoy their free time hiking, kayaking, golfing, bicycling and motorcycling.

http://www.nickersonpa.com/