People instinctively write down their spouse, their children, parents or siblings when deciding the beneficiary of an IRA. However, it may not be the best decision and should be carefully considered and chosen wisely, according to Morningstar in "Who Should Inherit Your IRA?"
If an IRA is consistently paid into and wisely invested, it can grow to be of tremendous value and sometimes your biggest asset. Therefore, the beneficiary of your IRA should be chosen based upon where the money will do the most good.
Since there are different tax implications for different types of beneficiaries, you should consult with an estate planning attorney.
Doing so will help ensure that your IRA and the rest of your estate can be distributed to heirs in a way that is fair for everybody and has the fewest negative tax implications for everyone.
Beneficiary designations should be done as part of your overall estate planning.
An estate planning attorney can advise you on creating an estate plan that fits your specific circumstances.
Reference: Morningstar (Sep. 10, 2017) "Who Should Inherit Your IRA?"