The IRA custodian's policies can determine who gets an IRA owner's account. If the IRA custodian uses the "per stirpes" method of distribution, then if the beneficiary dies before the IRA owner, the beneficiary's descendents will inherit the IRA. If the IRA custodian uses the per capita method of distribution, then the other primary beneficiaries will inherit the deceased beneficiary's share. Similarly, the IRA custodian can determine if the IRA stretch is permitted as can a plan administrator as specified in a qualified plan summary document.
The IRA custodian can also determine whether an account can be transferred at death and whether a fee is involved. None of these issues are arbitrary. They are all spelled out in the IRA adoption agreement which IRA owners and their advisors never read. The financial advisors that do review this for their clients stand out and can easily take accounts away from lesser advisors who do not understand the important role that the IRA custodian can play.
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