IRA Beneficiary
18. Disadvantages
However, there are some disadvantages you must consider.
Any time you name an individual as beneficiary, you lose control. After you die, your beneficiary can do whatever he or she wants with this money, including cashing out the full balance of the account and destroying your carefully made plans for long-term, tax-deferred growth.
The money could be available to the beneficiary's creditors, spouses and ex-spouses.
And there is the risk of court interference at incapacity.
If any of this concerns you, consider using a trust, which is Option 3.