IRA Beneficiaries

Question:

If a customer has two traditional IRA CDs at the same institution, is he allowed to set up different beneficiaries on each IRA account?

Answer:

He has one IRA; i.e. he signed one IRA agreement, but it contains two investments? In that example, he needs a single beneficiary designation, but he can list as many beneficiaries as he wishes.

OR

He has two IRAs; i.e. he signed two IRA agreements and they each contain a single investment? He needs two beneficiary designations and he can list as many beneficiaries as he wishes.

Analogize an IRA to a bucket that you put investments in. An IRA that holds stocks, bonds, and time deposits is still just one IRA. The customer does not name a beneficiary for each investment. If a customer has multiple time deposits in the same IRA it works the same way.

First published on BankersOnline.com 3/14/11