Disclaimer of IRA inherited from spouse
Is there any possibility that the surviving spouse who is not yet 70 1/2, who has never taken posession of an IRA inherited from his spouse who died in 2004(at age 56) disclaim the IRA to her son?
Is there any possibility that the surviving spouse who is not yet 70 1/2, who has never taken posession of an IRA inherited from his spouse who died in 2004(at age 56) disclaim the IRA to her son?
Permalink Submitted by Bruce Steiner on Wed, 2007-09-12 03:16
He can disclaim if he does so within 9 months of her death (or 9 months after he reaches age 21, if later). If he disclaims, he can’t specify who will receive the IRA. Unless there is some other provision in the beneficiary designation, if he disclaims, it will go to the contingent beneficiary as if he predeceased his wife.
He should discuss this with the attorney handling his wife’s estate, or the attorney who handles his estate planning, or other competent tax/estates counsel.
Permalink Submitted by Alan Spross on Wed, 2007-09-12 04:14
Since the survivor cannot disclaim at this late date, they should at least have the IRA retitled and name their own successor beneficiary. At the appropriate time they can make the IRA their own. This is usually done after they reach 59.5 and no longer face an early withdrawal penalty. There is no penalty on an inherited IRA.
One possiblity is to take some distributions, and gift them to the son to supplement the son’s own retirement savings plan.