□ Will the custodian or plan administrator require that a designation of a beneficiary or beneficiaries be done on their own forms, or will they accept as valid a detailed, customized beneficiary designation created in conjunction with your retirement plan professional? A custodian or plan administrator’s own form is often too limiting. But, be prepared to sign a document relieving the plan administrator or IRA custodian of liability for accepting your form.
□ In the event of your death, will the custodian permit your beneficiary or beneficiaries to receive payments over the period permitted by tax law and IRS rules and regulations, or will they mandate a shorter payout period?
□ In the event of your death, will the custodian permit your beneficiary or beneficiaries the amount of time granted by the tax law or IRS rules and regulations to choose among any available options, or will the custodian require a choice be made in a lesser time?
□ In the event of your death, will the custodian permit your beneficiary or beneficiaries to do a trustee-to-trustee transfer of the IRA account to a different custodian?
□ In the event of your death, will the custodian permit the beneficiary of any portion of the account to name a subsequent beneficiary, for the sole purpose of avoiding probate in the estate of the beneficiary, in the event the beneficiary should die prior to the exhaustion of the account balance?
□ If at the time of your death, your beneficiary or beneficiaries are permitted (by their election or otherwise) to take distributions over a term certain number of years, will the custodian permit distributions over that period even if a beneficiary should subsequently die? (For example, if, at death, the beneficiary is permitted a payout period that computes to 40 years, the tax law locks in that 40 year pay-out period, even if the beneficiary should die sooner. Will the custodian permit this?)
Still have money in your employer’s 401(k) or profit sharing? Like custodians, they may have their own rules that limit your beneficiaries’ flexibility and tax benefits.