Don't make your estate your IRA beneficiary

Q: Because my children are the beneficiaries of my estate, does it make sense to name my estate as my individual retirement account (IRA) beneficiary?

A: Generally, it does not. Even if your children are beneficiaries of your estate, if they are not the direct beneficiaries of the IRA they must take distributions based on your life expectancy, not theirs. Designating the children individually as beneficiaries allows them to spread the withdrawals over their own life expectancies, producing lower annual withdrawals and continued deferral of taxes.