While our team is based in Jackson, Michigan, we proudly serve families both locally and across the U.S. We know that when it comes to estate planning, many people focus on creating a will or trust—but forget how powerful a tool beneficiary designations can be.

Whether you’re planning to leave your IRA to your spouse, split it between your children, or include a charitable organization, your beneficiary form plays a crucial role in what happens next.

Mistakes here can lead to unnecessary taxes, delays, and stress for the people you care about most.

That’s why we created a quick video walking through five common pitfalls to avoid—and what to do instead to keep your legacy intact.

Watch the Video:

How to Plan for Multiple Beneficiaries (Without the Headaches)

Why Beneficiary Planning Matters

If you name multiple beneficiaries on an IRA, it’s important to get the details right. IRAs are subject to specific timelines and IRS rules, and missing a key step can limit the tax flexibility your heirs might otherwise have.

Here are a few critical things to understand:

1. Why Name More Than One Beneficiary?

You can leave your IRA to more than one person or organization—without the hassle of creating separate accounts in advance. But clear designations are key.

2. Pay Attention to Key Deadlines

• September 30 of the year after death is when the IRS locks in “designated beneficiaries.”
• If your form includes non-designated beneficiaries (like a charity or an estate), their portion must be cashed out by that date to avoid disrupting other heirs’ timelines.

3. Set Up Separate Inherited IRAs

To preserve tax benefits, each beneficiary should have their own inherited IRA by December 31 of the year after your passing. These accounts must include your name and the term “inherited” but will be tracked under the beneficiary’s Social Security Number.

4. Stretch IRAs Are Still Possible for Eligible Beneficiaries

If separate inherited accounts are created in time, each eligible beneficiary may be able to use their own life expectancy to stretch distributions over time. This could mean smaller, more manageable withdrawals and potential tax savings.

5. What If You Miss the Deadlines?

If the accounts aren’t split properly or on time, your beneficiaries may face a 10-year withdrawal rule. That can mean larger distributions and bigger tax consequences than necessary.

Pro Tip: Keep Your Beneficiaries Updated

Life changes—marriages, divorces, births, and deaths—can make your original plans outdated. Review your beneficiary forms regularly to make sure they reflect your current wishes. (And remember: your beneficiary form overrides what’s in your will!)

Who Should Pay Close Attention to This?

This planning is especially important if:

• You have more than one child or heir
• You’re naming a trust or charity as a beneficiary
• You haven’t reviewed your beneficiary forms in several years
• You want to minimize taxes and maximize control for your loved ones

Download the Full Guide: Planning for Multiple Beneficiaries

For a deeper dive, we recommend this helpful whitepaper from our partners at Ed Slott & Company:

👉 Download the Whitepaper

This 5-step guide explains how to avoid the most common beneficiary mistakes, along with clear timelines and tax-smart planning strategies.

Our team participates in ongoing training through Ed Slott’s Elite IRA Advisor Group℠ to stay up to date on complex retirement and beneficiary strategies.

Have Questions About Your Beneficiary Setup?

We’re here to help.

Whether you’re updating an old plan or creating one for the first time, our team can help make sure your accounts are structured in a way that protects your loved ones and reflects your values.

Schedule a no-obligation visit with our advisory team to get started.

This material is for informational purposes only and should not be considered personalized financial, investment, or tax advice. Please consult a qualified advisor before making decisions based on this content.