IRAs have beneficiaries and "designated beneficiaries," and it is important to know the difference. If you wish your heirs to have the opportunity to take full advantage of "stretch" IRAs, and to avoid other possibly costly mistakes, be sure your heirs are designated beneficiaries. Here's the difference and why it matters.
The beneficiary that inherits an IRA can be an individual or a legal entity such as a charity or an estate. But a designated beneficiary must be a living person 'with a pulse' who is named on the beneficiary form of the IRA.