Who should be the beneficiary of an IRA

Normally, when a client has a trust, I like to have the first beneficiary be the trust and the contingent beneficiaries be the humans. Then, if one of the humans beneficiaries predecease the participant, then the trust will distribute that deceased child’s share per terms of trust and if that includes a minor beneficiary, we can avoid court involvement with a conservatorship because the minor’s share will be held in trust. Conservatorship have gotten very expensive to keep going with all the new court rules. Also, you cannot imagine how many conservatorships I have had to seek because of an IRA for a minor grandchild which exceeds $10,000 (even if it is just a few hundred dollars over). If all of the children or beneficiaries under the trust are over the age of 18, then the Trustee can disclaim the IRA within 9 months and the human contingent beneficiaries can take the IRA. Also, by having the trust be the beneficiary, we allow for a continuity of distribution. If the participant has a charitable interest , then the trustee can use the IRA to distribute to the charity which does not have to pay income tax on distributions, and the children can receive assets which are not subject to income tax (like other investments).