A complete estate plan for your IRA might call for you to name your spouse as primary beneficiary, with your children as backup beneficiaries. You might also like to name a trust as a backup to the backup, if your children predecease you and your grandchildren are next in line. However, some financial firms will not accept a third level of IRA beneficiaries.
In that situation, you can:
* Move the IRA to a different firm, one that will allow you to designate beneficiaries as described above.
* Name your spouse as primary beneficiary and name the trust as backup beneficiary. In the trust, provide that the IRA is to be transferred outright to your children, as long as they survive you. Just make sure that the trust is drawn up by a competent attorney and the firm holding your IRA accepts this arrangement.
* Name your spouse as primary beneficiary and name your children as backup beneficiaries. In case one of the beneficiaries predeceases you, update the form to include the trust.