Estate IRA
Wife is handling an Estate IRA of her deceased husband. She is the Personal Representative of the Estate and would like the IRA money to go to her 2 minor children. Can she transfer the assets inside the Estate IRA in-kind 50/50 to each of her 2 children in Inherited IRA’s? Or would the estate have to pay the tax and transfer the assets to non-retirement accounts like an UTMA?
Permalink Submitted by Alan - IRA critic on Fri, 2018-01-12 03:19
If she is the beneficiary under his will, she will first have to file a qualified disclaimer and the children would then need to be next in line under the state intestate provisions (would have to be HIS children also) if they were not named as contingent beneficiaries in his will. Then she could assign the IRA to separate inherited IRAs for each child. If husband passed prior to his RBD (likely due to age of the children) however, the 5 year rule will apply, so the children would not get the LE stretch. Another possibility if SHE is the beneficiary under his will would be to use prior PLRs to allow her to roll over the IRA to her own IRA, which would produce a much longer stretch. As you can see, his will plays a major part in determining what actions are required.