Estate as NYC Teacher’s TDA beneficiary
TDA default beneficiary is Estate – which has a sole beneficiary who is disclaiming in favor of their 3 adult children. Decedent passed in 2015 and would have been 70.5 by year’s end. TDA wants to make a lump-sum distribution to Estate. Fiduciary’s fiscal year is Dec 31.
Is there any way to ‘pass’ TDA to sole beneficiary and stretch the payout?
Is there any way to ‘pass’ TDA to children and stretch the payout even further?
Would payout be over lifetime of recipient or 5 years following year of death?
If unable to stretch, would the Fiduciary return include the $ and deduct by making a K-1 to each child? a 1099-R?
Permalink Submitted by Alan - IRA critic on Mon, 2015-10-19 17:20
The insurance company determines what beneficiary distribution options are available. While it is normal for these companies to push for a lump sum distribution, you might check the contract to determine if there are other options. With an estate beneficiary that would be a long shot. Note that if this had been an IRA or qualified plan, the 5 year rule would apply since owner passed prior to the RBD. With an LSD to the estate in most cases the death benefits would pass via K 1 to the estate beneficiaries. The only 1099R would be issued by the insurer to the estate EIN.