People instinctively write down their spouse, their children, parents or siblings when deciding the beneficiary of a retirement plan or IRA. However, that may not be the best decision, and you should carefully considered your options, according to Morningstar in "Who Should Inherit Your IRA?"
If an IRA is consistently paid into and wisely invested, it can grow to be of tremendous value and sometimes your biggest asset. Therefore, the beneficiary of your IRA is a very important decision.
Since there are different tax implications for different types of beneficiaries, you should consult with an estate planning attorney when choosing a beneficiary. Doing so will help ensure that your IRA, and the rest of your estate, can be distributed to your beneficiaries in a way that is fair for everybody and has the fewest negative implications for everyone.
Beneficiary designations are a critical part of your overall estate planning.
An experienced estate planning attorney can advise you on creating an estate plan that fits your unique circumstances.
Reference: Morningstar (Sep. 10, 2017) "Who Should Inherit Your IRA?"