IRA help
Have a strange one that I recently ran accross that I need guidance on.
Sue passed away with an IRA that had as the beneficiary her son Joe. The money was never intended, atleast thats what Im told, to go to Joe but was suppose to go to Jim (Husband). Joe has agreed to disclaim the IRA and neither fund family has a problem with that.
One of the companies thru their agreement will make the husband the beneficiary the other since their is no contingent mentioned will make the estate the benefiary.
My question after saying all is what happens to the ability to do a stretch IRA or a spousal IRA if the IRA has to go thru probate the estate of the individual that passed away.
Hopefully I have given you enough information and I look forward to your responses
Permalink Submitted by Bruce Steiner on Fri, 2007-12-07 04:36
The general rules if an IRA is payable to the estate are that (i) if the IRA owner had reached his required beginning date, then the estate can stretch it out over the IRA owner’s life expectancy at his death (as if he/she had not died), and (ii) if the IRA owner had not reached his/her beginning date, then the IRA must be distributed by the end of the 5th year following the date of death.
But with enough disclaimers, it is often possible to get the IRA to the spouse such that the spouse can roll it over. See my article on this subject in the October 1997 issue of Estate Planning: http://www.kkwc.com/docs/AR20050125164755.pdf