IRA Owner passes away with no designated beneficiary?
What are the options for an executor when there was not designated beneficiary on an IRA?
Passed away in December 2008 and the assets were distributed to the estate. Can this be corrected and can the executor name a beneficiary other than the estate?
Permalink Submitted by Alan Spross on Wed, 2009-09-23 19:50
FIrst, I would check the IRA agreement to be sure that the estate is the default beneficiary under the IRA agreement. More than likely it is since the custodian should be adhering to the agreement, but stranger things have happened.
If correct, then the executor must follow the directives of the will, if any. If no will, then state intestate provisions will apply and they vary between states. Surviving spouse and childen typically are awarded the IRA in that order or in some cases, split between the two. The executor does not have the authority to make judgements such as a trustee with discretion could if a trust were named as the IRA beneficiary.
If there is a surviving spouse who acquires the IRA through the estate, there have been prior cases allowing that spouse to do a 60 day rollover into their own IRA. The RMD requirements vary with respect to whether the owner passed before or after the RBD.