Parents IRAS
Client’s mother died 08/14/08. Had several IRA’s with husband as primary beneficiary dan 3 grown children as contingent beneficiaries. Before husband could do anything with iras, he died 9/23/2008. Attorney and bank are now saying the estate of the husband is the beneficiary, and wants to cut checks to the estate. Is there any way to have the children, who are the beneficaries of the estate as well, to stretch the iras?
Permalink Submitted by Bruce Steiner on Tue, 2009-02-10 17:45
Even if it goes to the husband’s estate, there may still be some stretchout available (over the husband’s life expectancy as if he hadn’t died). That would preserve the marital deduction in the wife’s estate, at the cost of inclusion in the husband’s estate.
The husband’s executors may be able to disclaim on his behalf, in which case it would go to the children as the contingent beneficiaries. That would get a longer stretchout (over children’s life expectancies). It would result in the loss of the marital deduction in the wife’s estate, but would keep the IRA from being included in the husband’s estate.
Depending on state law, a disclaimer by the husband’s executors might require court approval. Since the deadline for a disclaimer is 9 months from the wife’s death, you should consult with competent tax/estates counsel promptly.
Bruce Steiner, attorney
NYC
also admitted in NJ and FL