Multiple IRA Accounts Can Be All Things to All People

If you have a substantial individual retirement account (IRA) balance and intend to leave some or all of the IRA to your beneficiaries, you may want to consider splitting it into several different accounts, each with its own beneficiary.

For example, let’s say you have three children, ages 25, 20, and 15, and one grandchild, age 5, and want to name them as the beneficiaries of your $100,000 IRA. Depending on your IRA plan rules, unless you specify otherwise, the account would typically be divided equally among the four beneficiaries. But if you divide the IRA into four separate accounts, each with a different primary beneficiary, you can give half to your children and the other half to your grandchild.

Splitting an IRA into multiple accounts is advantageous if there’s a significant age difference between beneficiaries because you can enable younger beneficiaries to maximize the potential for tax-deferred growth. Upon the IRA holder’s death, each beneficiary can calculate required distributions based on his or her own life expectancy, instead of on the life expectancy of the oldest beneficiary, which would be the case with only one account. Younger beneficiaries could take smaller distributions and reduce their current taxable income, leaving more in their accounts to potentially grow tax-deferred.

You can also select different investments for each account-perhaps a more aggressive stock fund for younger beneficiaries, who can afford greater risk, and more conservative funds for older beneficiaries, who need income. Your advisor can help you decide the best way to divide your accounts.

This Month’s Smile: Making a Great Cat Video Cat PortraitCat videos have the highest traffic ratings on the Internet. Maybe it’s because watching cats de-stresses us. Or it could be because cats are stubborn. Whatever. But if you want to go viral, you need to remember that your cat is the star, producer, and director of the show. You’re just the mildly entertaining human with a camera. To get your video, you’re going to need to remember these three tips inspired by Peter Gerstenzang’s How-to on

  1. Improvise. Your story line will be what your cat wants, not the other way around.
  2. Forget linear time. See #1.
  3. Shoot now, edit later. See #1 again.

Maybe cat videos go viral because getting a cat to do anything long enough to get the camera and record it is totally newsworthy!