Most people choose their spouse, if married, or a loved one.
However, the rules governing the distribution of IRA assets to beneficiaries are not so simple. Distributions must be made to the IRA beneficiary at least as rapidly as the distributions would have been made under the withdrawal method in effect at the time of the IRA owner's death. If the IRA owner dies before the mandatory minimum withdrawal beginning date, the rules are a bit more complex. If an IRA owner fails to designate a beneficiary, the IRA proceeds must be distributed to the IRA owner's estate by December 31 st of the fifth year following the IRA owner's death. If the IRA owner designates his or her spouse as the beneficiary, the spousal beneficiary has several options.