per stirpes
If an IRA has two beneficiaries with per stirpes, and one beneficiary disclaims, will the disclaiming beneficiary’s part go to the other beneficary or to the disclaiming beneficiary’s decendents?
If an IRA has two beneficiaries with per stirpes, and one beneficiary disclaims, will the disclaiming beneficiary’s part go to the other beneficary or to the disclaiming beneficiary’s decendents?
Permalink Submitted by Alan Spross on Tue, 2011-09-20 21:52
Hard to say for sure, because this determination is usually subject to state law, and might also be affected by the provisions of the IRA agreement. To avoid this situation, if the IRA owner wants the blood lines of the beneficiaries to receive the funds if the beneficiary disclaims, the beneficiary designation might include such wording, eg “Sharon and Jason, per stirpes including a qualified disclaimer executed by Sharon or Jason” . It is essential that the IRA custodian understand the intent of the IRA owner and many will assist in the wording to accomplish this goal, but if they are not comfortable they may even refuse a simple per strirpes designation. The custodian wants no part of legal disputes brought on my ambigous beneficiary statements.
If the IRA owner desires to include disclaimer options for the named beneficiaries, they should consult an estate attorney since the IRA custodian’s staff may well be unaware of state law in this situation.
Permalink Submitted by Peter Lingane on Tue, 2011-09-20 22:37
I agree with Alan’s suggestion that it is wise to consult a competent local attorney to insure that a disclaimer will produce the desired effect in your specific situation. That being said, I expect that the beneficiaries after a qualified disclaimer by Sharon would be Jason (one half) and Sharon’s decendents (one half) assuming that the beneficiary designation is “Sharon and Jason per stirpes.” Can anyone construct a scenario where this would not be the case?
Permalink Submitted by Alan Spross on Tue, 2011-09-20 23:49
Peter,
I think that would be the result in most states, but not necessarily all states. Determining the situation in the specific state may require some pretty deep research into the state statutes, probably even for experienced estate attorneys.