How to Stretch a Roth to a Beneficiary
- 1). Contact your brokerage firm and request beneficiary forms for your Roth IRA. Beneficiary forms allow you to pass your Roth IRA to another individual after you die.
- 2). Choose the beneficiaries of your Roth IRA and fill out the beneficiary forms. Name your spouse as the beneficiary if you choose to have her inherit your Roth IRA. A spouse does not have to take any distributions from the account, which means the assets may continue their tax-deferred status longer than in a stretched traditional IRA. The Roth IRA will transfer to your spouse as though it was her IRA from the beginning. Name your children or anyone else as your Roth IRA beneficiary if you choose. They must take distributions over the course of their lifetime using an IRS mortality table.
- 3). Return the forms to your brokerage firm. The paperwork should be processed immediately. Receive confirmation from the firm that your beneficiaries have been added to the account. At your death, the Roth IRA will be passed to your beneficiary, who can extend the tax-deferred status of the Roth IRA.
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