Pri & sec bene
owner & pri bene in accident, owner dies, pri bene (wife) in coma and dies in day or two. Sec bene (son) was originally named. Will son be considered bene and use his age for RMD? If not, what happens?
Thank you for so much help.
owner & pri bene in accident, owner dies, pri bene (wife) in coma and dies in day or two. Sec bene (son) was originally named. Will son be considered bene and use his age for RMD? If not, what happens?
Thank you for so much help.
Permalink Submitted by Alan Spross on Sat, 2008-08-30 05:00
First, the IRA agreement should be cited to see if there are any provisions dealing with a survival period. If not, then the state version of the Uniform Simultaneous Death Act would come into play. Many state versions of this use a 120 hour survival period. If the primary beneficiary passed within this period, they would be deemed to have pre deceased the IRA owner and the contingent beneficiary would become the designated beneficiary and be able to use their own life expectancy for RMDs. See link:
http://www.henssler.com/radio/071108/u-tipweek.asp
Permalink Submitted by [email protected] on Sat, 2008-08-30 05:35
Thank you for speedy reply.
If H owner age 71 begun RMD, W pri bene age 69, son sec bene age 50. H dies at scene, W dies one week later. Son inherits IRA, what determines his RMD?
Thank you for understanding my questions and responding to what must seem like simple ??. Thank you
Permalink Submitted by Alan Spross on Sat, 2008-08-30 20:02
No, these situations are anything but simple. The result can take different turns depending on what W did during the short period of her beneficiary status.
However, if see are to assume that W was not able to name her own successor beneficiary or disclaim, then W’s estate would be the successor beneficiary of W’s interest. The beneficiary of her estate would be who she named in her will, or if no will, then state intestate provisions would determine the estate beneficiary.
Whether this beneficiary turned out to be the son or someone else, the RMD for H’s year of death would have to be distributed by year end, and in year’s following the year of the H’s death, the RMD would be based on the remaining non recalculated life expectancy of W. For example, if W would have been 70 in the year following H’s death, then the RMD divisor would be 17.0 for that year, and be reduced by 1.0 for each year thereafter. This would draw down the IRA about twice as fast as if the son would have been able to use his own life expectancy as would have been more likely in a non disaster situation.
Note that there are a number of ways this could go if any of the facts or assumptions I have made are different. It is even possible for H to have passed prior to his required beginning date and have been 71. This is not likely but depends on exactly when he turned 71. If H passed prior to his required beginning date, the result changes totally.
Permalink Submitted by Bruce Steiner on Sun, 2008-08-31 01:31
W’s executor may be able to disclaim on W’s behalf. Depending upon state law, this may require court approval. Whether this is desirable depends upon the situation. the attorney handling the estates should be able to advise you as to whether it would be advisable for W’s executor to disclaim, and if so, he/she should be able to handle it.