Who gets what and what goes where sounds like a riff on an old joke. But when it comes to estate planning for your IRA, those are important questions.Here’s where to find the answers.

• Your custodial agreement. The custodial agreement spells out how the custodian of your IRA — the bank, trust, or other entity that handles administrative functions for your account — will deal with distributions after your death. For instance, your custodian may have rules about how your account can be transferred, and who the default beneficiaries are if the heirs you name pre-decease you.

• Your beneficiary designation form. You can choose one or multiple primary and contingent beneficiaries, and specify dollar or percentage amounts for each. Your choices affect how your account is distributed and taxed after your death.

  As an illustration, say you decide to split your IRA among your three adult children. Since the life expectancy of the oldest beneficiary determines the amount of required distributions, your IRA may be paid out more quickly than you’d like. To avoid this outcome, your children could split the account after they inherit.

  Alternatively, while setting up your estate plan, you can divide a single IRA into three, with each child named as primary beneficiary on a separate account.

To discuss planning strategies for your IRAs and other retirement plans, give us a call.

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