Estate Beneficary
Deceased owner had non-designated bene (Probate Estate) on IRA that is now titled in the name of deceased owner’s estate with executor listed. Can the IRA be retitled to an inherited ira for the beneficiary of the will after it has already been retitled to the estate? The executor would like to close the estate.
If not, I imagine the estate must be kept open for as long as it is distributed. Would it be cost effective or to time consuming to take the five year payout and keep the estate open or should the bene of the wil just take a lump sum?
Permalink Submitted by Bruce Steiner on Tue, 2008-05-27 22:43
The executor can distribute the IRA in kind, without affecting the stretchout. If the IRA owner died before his/her required beginning date, so the 5-year rule applies, then depending on the amount involved, the executor may want to keep the estate open, use a fiscal year, and in effect be able to spread the distributions out over 7 taxable years. The attorney handling the estate should be able to advise the executor as to his/her choices.