I am working with a new client. She is an attorney, so very precise. She said that her cousin who lives in Australia had a large IRA account with a US Mutual Fund company and that the beneficiary of the account is a charity. But she got scared just before she died and made my client a co-owner of the IRA. I have never heard of co-ownership of an IRA account. In any case my client is being advised by an estate planning attorney that because she is the co-owner, but not the beneficiary that she is required to pay taxes on the full amount of the value of the IRA ($700K approximately). Sho the estate planning attorney is recommending that she take withdrawals in 5 equal installments to cover the taxes. And then after 5 years the charitable beneficiary will receive the proceeds.

All of this seems rather bizarre to me. Have you heard of a situation like this before and what would you recommend the course of action should be?

Thanks,