Are you a grandparent? Do you want to leave an IRA to a grandchild? If so there are some methods that you need to follow to ensure that the full benefit of the IRA is passed on to your grandchild. First is to list the grandchild as a beneficiary on the IRA allowing them to take out the minimum yearly withdrawal based on their age and the IRS tables. If you leave the IRA to them as a beneficiary then they are allowed to take the minimum withdrawals out over their lifetime allowing the IRA to continue to grow tax deferred or even tax free. If you leave the IRA to a grandchild by means other than the beneficiary designation they will only have five years to withdrawal the entire amount from the IRA. If your grandchild is a minor you will need to take certain steps in order to leave the IRA to them. One is to list them as the beneficiary and select an adult as a custodian to oversee the IRA until they reach the age of majority. The custodian can be their parent or any other trust worthy adult you see fit to oversee the account until your grandchild is no longer a minor. The other option is to create a trust for the benefit of your grandchild and select a trustee to oversee the trust on behalf of the minor grandchild. This can be an effective way to ensure there is some more control over the funds for a longer period of time as you can dictate the terms under which the funds can be accessed and this will be enforced by the trustee. A trust can extend the control of the trustee past the age in which a minor becomes an adult and can ensure the IRA will stay intact longer as compared to a simple beneficiary designation that names a custodian. But in both instances it is imperative that the IRA be left to your grandchild by the means of a beneficiary designation and not by any other means. As far as taxes any IRA left to a grandchild will be subject to the generational skipping tax as most grandchildren are over 37.5 years in age difference from their grandparent. If the IRA that is left is a Traditional IRA it will be subject to taxes on the withdrawals based on the purchase price of the assets. If the IRA is a ROTH IRA it will enjoy tax free withdrawals for the assets. Leaving an IRA to a grandchild is a great way to pass on your estate to younger members of your family in a way that allows the funds to continue to grow with minimal withdrawal requirements. But before you do any estate planning such as this consult an expert to make sure you are gaining the maximum benefit and passing along the maximum benefit to your grandchild.