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I'm considering listing my 7 grandchildren (ages 3 to 18) as the beneficiaries of my IRA. My thought was that they could use it to help pay off college loans, put a down payment on a house, or, if possible, just take minimum required distributions and let their inherited IRA grow for decades till they retire, taking only required minimum distributions.

Now I'm wondering - suppose I die before they graduate from college? I understand that in obtaining financial aid for college, the student's assets are tapped to a greater extent than the parent's assets. Are inherited IRA's tapped to the same extent as other assets? Are the parents or the student required to withdraw money from an IRA (a taxable event)in order to contribute to college expenses?

My question here is this: as far as obtaining financial aid for college, would it be better for all concerned for me to list my 3 grown children as the IRA's beneficiaries, or the 7 grandchildren.

I'm X-posting this on the Inheritance Strategies Board, the Tax Strategies Board, and the Paying for College Board.

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