Inherited IRA benificary’s benificary can not be found

Submitted by Suzanne Emmons on Thu, 2017-07-20 10:19

My brother inherited an IRA from my Mother and was taking the RMD. My brother then passed away. I am the executor of his estate. The custodian tells me he has named a successor beneficiary which is not family.

The person who was named successor beneficiary can not be found and has not come forward to claim. It has been over one year since my brother passed and RMD must be made immediately to avoid federal tax penalties. There is a contingency beneficiary who can be found and of course my deceased Mother who is the original owner of the IRA had contingency beneficiaries.

In what time frame can I contact the contingency beneficiary? Or, since my Mother is the original owner of the IRA can we use her listed beneficiaries?

My Mother was a resident of NYS when she passed. My brother was a resident of Florida when he passed.

Also my Mothers IRA was originally part of a NY trust.

Hope you can help with great advice. Thank You!



Submitted by Ben Meyer on Thu, 2017-07-20 15:13

  • In what sense was the IRA part of your mother’s trust?  Was the trust the beneficiary of you mother’s IRA?  This sounds inconsistent with your looking to the IRA custodian for a successor beneficiary, unless the IRA was previously split out of the trust as the separate IRA of your brother.
  • If the IRA had been created as the separate IRA of your brother, then the successor beneficiary named by your brother is applicable.  Are you able to determine if the successor  beneficiary was living at the time of your brother’s death?  If not, then the contingent beneficiary of the brother would be entitled to receive the account.  This is not really a concern of the estate, but possibly you can employ a skip tracer to find the successor beneficiary or determine if he has passed, using the information obtained from the custodian, hopefully including middle name, address, SSN, DOB.  Have you looked through the records and papers of your brother?  You might find some useful data or hints in his personal phone books, back phone bills with call records, emails, etc.  Or a careful reading of the trust might provide guidance for this situation if the trust is still involved.
  • The RMD for the year of death not yet taken from an IRA belonging to your brother belongs to either the brother’s successor beneficiary, if living at the time of your brothers death, or to the brother’s contingent beneficiary, not to your brother, so your brother’s estate would not be involved.  The IRA custodian would treat this as an unclaimed account if the applicable named beneficiary cannot be found.  The IRA belongs to the estate only if there are no named beneficiaries, not if they cannot be found.

Submitted by Suzanne Emmons on Sat, 2017-07-22 14:59

Thank You for the information.   So even if the primary benificary cannot be found it will go to unclaimed funds in the benificary’s name and then only if that person’s family checks unclaimed funds find it can be claimed.   So even tho it was my Mothers IRA, the family has lost all claims to it, sad.  Or, by any chance will it go to unclaimed funds in my deceased brothers name?  

Submitted by William Tuttle on Sat, 2017-07-22 15:48

It really has to be that way to respect the beneficiary selection of the decedent. Take the case where the beneficiary was someone the family despised and they knew exactly how to contact this person. They could intentionally not be forthcoming in helping the custodian locate this person. Then they could just wait and be unjustly rewarded for this action if the unclaimed property reverted back to the decedent and the heirs claimed that property.

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