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On my Traditional IRA, I have my wife as my primary beneficiary, and my minor child as a contingent beneficiary. Can anyone tell me if this is wise to have a minor beneficiary? If both my wife & I were to die, would the IRA custodian be able to distribute this asset to the minor child, and could it be governed by our designated guardian for this child? What are the best ways to minimize the tax on this distribution? Lastly, what are the tax or control advantages in setting up the contingent beneficiary as a trust for the minor child?
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Can anyone tell me if this is wise to have a minor beneficiary?

It is better to have them named than not too.

If both my wife & I were to die, would the IRA custodian be able to distribute this asset to the minor child, and could it be governed by our designated guardian for this child?

This probably depends on your IRA administrator. The rules have been made very plain for spouses, however I beleive they can vary considerably for contingent beneficiarys.

What are the best ways to minimize the tax on this distribution?

This is difficult to answer with the new tax law recently being passed. All of us may have to re-evlauate our tax plans.

Lastly, what are the tax or control advantages in setting up the contingent beneficiary as a trust for the minor child?

If I were going to do this I would set up a trust for yourself and your spouse and make it the benficiary of all your assets. Then in your wills, one for you and one for your spouse, leave the trust to your minor child while naming a family member or someone you turst to be trustee of the trust. You can leave explicit instructions to the trustee on how you want the trust managed.

Your concerns are very real and I would encourage you to search out a good estate planner and lawyer to help you out on this.

Good luck,
Tony
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