disclaimant and executor
Inherited IRA from mother passed 3/2012… yearly RMD has been met
Case: 8 children…. 1 primary bene….1 contingent bene….however intent was to have children receive equal shares…..Primary disclaimed 7/8 (also the executor)….Contingent disclaimed 6/7…remainder went to estate and probate period is up…..can the executor (even though he was a disclaimant) assign the estate’s beneficial interest in the IRA to the 6 remaining beneficiaries? (Will states assets to be divided equally amongst all eight children.)
Permalink Submitted by Alan Spross on Tue, 2012-10-30 23:26
There might be a legal problem here. Under a qualified disclaimer, the disclaimant (unless a spouse) cannot receive any funds from the disclaimed assets. There are two estate beneficiaries whose disclaimed funds to the estate. They should have disclaimed their shares of the IRA before the disclaimer was filed. I don’t know if a disclaimer that does not meet the definition when executed can be made to meet the definition afterwards by disclaiming their estate share of the IRA post disclaimer.
None of this affects the executor’s responsibilities. He can assign the remaining shares of the IRA to the 6 beneficiaries from the estate, although that will not change their RMD calculation. Estate beneficiaries must use the decedent’s remaining life expectancy for RMDs, or the 5 year rule if mother passed prior to her RBD.
Of course, the qualified disclaimer issue noted above should be resolved before proceeding further.
I assume the IRA custodian never raised this question, and probably does not know or care about the will beneficiaries.
Perhaps Bruce Steiner (estate attorney) can shed more light on this. He frequently posts here.
Permalink Submitted by Jeff Nolan on Tue, 2012-10-30 23:51
We filed a disclaimer for both primary and contingent beneficiaries with the ira custodian and the assets have been take out of the ira and transferred to inherited ira’s in their names. In addition the wording in the disclaimer states neither disclaimant is not entitled to any of the disclaimed ira assets that have passed to the estate. With that said, can the executor (even though he was a disclaimant) assign beneficial interest of the remaining IRA assets to the beneficiaries who were not listed in the original IRA document?
Permalink Submitted by Alan Spross on Wed, 2012-10-31 02:24
Yes.
Here is a link that explains the process and includes a sample letter:
http://www.ataxplan.com/bulletinBoard/ira_providers.cfm