Resign as an IRA Beneficiary.
If a person wishes to resign as an IRA Beneficiary what are the rules?
1. Is there a time limit to resign as a beneficiary?
2. Is there a form that needs to be filed?
3. Can the original beneficiary appoint a replacement beneficiary or must it be the “contingent beneficiary” designated by the decedent.
4. If the decedent did not designate contingent beneficiary can the original primary beneficence designate the contingent?
Thank you.
Permalink Submitted by Alan - IRA critic on Thu, 2015-09-03 01:09
You are talking about a qualified disclaimer. The deadline to file such a disclaimer per Sec 2518 (https://www.law.cornell.edu/uscode/text/26/2518) is 9 months following the date of death. There is no specific form but the disclaimer must meet all the requirements per Sec 2518. The disclaimant cannot re direct the assets in any way. The contingent beneficiary would receive the assets and be treated as the designated beneficiary for RMD purposes. There would be no gift tax ramifications as the disclaimant is treated as if they had pre deceased the contingent beneficiary. If the decedent had not named a contingent beneficiary, the IRA agreement default beneficiary provisions would determine the rights to the IRA assets. Quite often that would mean that the IRA would go to the estate of the decedent.
Permalink Submitted by Bruce Steiner on Thu, 2015-09-03 02:51
The filing and service requirements for disclaimers vary from state to state. The lawyer handling the estate, or the lawyer for the person disclaiming, should know how to prepare, file and serve the disclaimer.