3 designated beneficiaries, 2 dead
Aunt Mary’s IRA designates 3 non-spouse beneficiaries (all siblings), to share equally. Mary dies in September 2007 at age 90. At her death, only one of the designated beneficiaries is alive, age 87. Does the one remaining beneficiary get the entire IRA, or does it get divided with the estates of the other two? What would be done if the plan document is not specific as to this possibility?
Permalink Submitted by Alan Spross on Tue, 2008-03-25 22:13
Typically, the IRA agreement in this case would entitle the remaining living beneficiary to the entire account. I would be surprised if the contract was silent, but of there is no “per stirpes” or “per capita” wording following the deceased beneficiaries, the result would likely be the same, ie the surviving beneficiary gets the entire balance.
Permalink Submitted by Bruce Steiner on Wed, 2008-03-26 18:53
The IRA owner would normally specify in the beneficiary designation whether a deceased beneficiary’s share goes to his/her issue or to the surviving beneficiaries. Most people would want a deceased child’s share to go to his/her issue, but would not necessarily want, say, a deceased friend’s share to go to his/her issue.