estate as beneficiary of ira
2 children were named primary beneficiaries 50% each. They want to disclaim or assign 1/3 to their sister who was not named a beneficiary due to her being on medicaid to care for her 2 disabled children. The estate will then be named beneficiary, can the estate then transfer that 1/3 to the sister non-taxable and then the sister continue RMD’s based on her 73 yr old mom’s IRS distribution factor. Thank you.
Permalink Submitted by Alan - IRA critic on Wed, 2019-05-29 18:41
A disclaimer cannot include any assignment of the death benefits. They pass according to the IRA agreement, and very likely to the estate of the decedent and therefore the beneficiaries contained in the will. If the 2 children are also named in the will, the disclaimer will not be qualified unless they also disclaim their interest under the will. Is such a complex situation, as estate attorney would likely be needed to correctly handle and file the disclaimers. A cooperative IRA custodian will also be needed to accept assignment of an inherited IRA for the sister so the estate can close. Mom’s remaining life expectancy would apply to this inherited IRA, but not to the two designated beneficiaries that filed a partial disclaimer(s) and established their own inherited IRAs by the deadline.