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At New Direction Trust Company, it’s important that your wishes are upheld whenever possible. This would be especially true in the unfortunate event of your death. Designating beneficiaries for your self-directed IRA can help protect the tax-advantaged nest egg you’ve built. Without beneficiaries, your account my end up in probate and your holdings may be distributed and taxed.

You can also help ensure that your hard-earned cash and assets go to the exact person or persons you want. New Direction Trust Company allows you to add, remove, or revise beneficiaries at your discretion, so don’t hesitate to contact our office if you need to make a change to your account.

Types of Beneficiaries

Primary Beneficiary: The first person(s) in line to inherit your account. You may designate multiple primary beneficiaries as long as their respective percentages add up to 100% (two beneficiaries can split 50/50, 75/25, etc.).

Contingent Beneficiary: Your holdings will only go to your contingent beneficiary if your primary beneficiary is unable to inherit the account. As with primary beneficiaries, you may designate multiple contingent beneficiaries.

Spouse Beneficiary: If your husband or wife inherits your entire account, he or she may treat the account as their own without any special parameters surrounding distributions, contributions, or transfers/rollovers.

Non-Spouse Beneficiary: Non-spouse beneficiaries may elect to take annual required minimum distributions, distribute the account over the following five years, or distribute the account all at once. Other factors apply for non-spouse beneficiaries as well.

Example Scenarios

  1. Your spouse is your sole primary beneficiary. Your spouse will inherit the entire account in the event of your passing. As your sole beneficiary, he or she will have no distribution obligations.
  2. Your spouse (50%) and two children (25% each) are all primary beneficiaries. Each beneficiary will open their own self-directed IRAs and receive their designated percentages of your holdings. Because your spouse was not your sole beneficiary, he or she will have to take distributions in the same manner as a non-spouse beneficiary.
  3. Your spouse is your sole primary beneficiary and your two children are contingent beneficiaries (50% each). If your spouse is able, he or she will inherit the account in full. Only if he or she is unable to inherit the account will your two children receive their respective 50% shares.

Other Key Considerations

  • New Direction Trust Company allows you to add, remove, or revise beneficiaries at any time.
  • You may complete and submit our Beneficiary Designation Form.
  • Accounts without beneficiaries will be issued to the decedent's estate in accordance with legal instructions received by our office.
  • Beneficiary designations received by New Direction Trust Company will supersede all other documentation (a will, a trust, etc.) unless sufficient legal cause is provided to issue the account in another manner.
  • If you're married and live in a community property state, you must provide written authorization from your spouse to designate a non-spouse as your primary beneficiary. Community property states include: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
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