NO DESIGNATED BENEFICIARY
Wife(not yet 70 1/2) dies with no designated beneficiary. Husband “inherits” IRA however passes away within 10 days of wife.
Husband also has his own IRA and has been taking RMD’s. Husband had no designated beneficiary on his IRA either.
Daughter is beneficiary of all estate assets. What would be the distribution period for daughters withdrawals? ( her life expectancy, fathers remaining life expectancy or 5 year rule, or combination of above)
Permalink Submitted by mk foss on Fri, 2011-11-11 18:00
The daughter could only use her life expectancy if she were named as a beneficiary. It’s possible that the daughter would be named the beneficiary for the father based on the IRA adoption agreement and the fact that he had no surviving spouse. That should be looked into, but rarely happens.
With no beneficiary for the father’s IRA, the default beneficiary may be his estate. That would mean that a probate proceeding would be necessary to transfer the ownership to the daughter. In that case, the father’s remaining life expectancy would be used and distributions would be determined fromthe single life table.
The mother’s IRA might pass to the father as the default beneficiary under the IRA adoption agreement. If that’s the case, it would be another asset for the probate proceeding mentioned above and RMDs would use the father’s remaining life expectancy.
If there is no designated default benenficiary on the mother’s IRA, a probate proceeding would be required for her IRA. The Five-year rule would apply to this IRA in that case. If the father’s executor would disclaim his interest as a beneficiary (if the agreement specifies that he is the default beneficiary), then the mother’s estate would be the likely beneficiary and the 5-year rule would apply.
I wish there was a spell check. Some of these words are easy to misspell.
Permalink Submitted by Bruce Steiner on Sat, 2011-11-12 23:28
You probate the Will, not the assets.
To the extent W’s assets are payable to H, H’s executors have to decide whether they want to get the marital deduction in W’s estate and have the assets be subject to estate tax in H’s estate, or to disclaim and have them be subject to estate tax in H’s estate.
Note that in many states, court approval is necessary for an executor to disclaim. So if H’s executors are considering disclaiming, they should allow sufficient time to obtain court approval, if necessary.