Disclaimer on IRA into Estate

Submitted by helen roland on Thu, 2020-09-17 15:30

Inherited Traditional IRA –
I am grandmother of 4 young children and only direct family member left (sister of deceased). As the beneficiary. I want to disclaim the IRA which pass on into the decedent’s Estate.

Can the executor/administrator of the Estate move the disclaimed IRA to decedent’s only nephew or his children (grand nieces of decedent) through the disclaimer estate?

Or does the IRA go only to the executor/administrator beneficiary and cannot pass further to family members?

Another question: I find this confusing and had gotten two different answers from financial people:
Secure Act exclusion from 10 year payout.
Can have longer payout of more than 10 years if::
“a beneficiary who is no more than 10 years younger than the deceased account owner”
I am 75 years old and sister passed at 68 years old. Does the above exclusion apply to me and I would have
MORE than 10 years to cash out? Life expectancy years, maybe 15 years.



Submitted by Alan - IRA critic on Thu, 2020-09-17 20:56

  • Assuming sister passed this year, you would be an “eligible designated beneficiary” or EDB because you are not more than 10 years younger than sister. As such you could stretch the inherited IRA over your remaining life expectancy. If you were 76 on your birthday in 2021, your distribution period would be 12.7 years starting next year. That’s longer than 10 years, but would have annual RMDs each year.
  • If 68 year old sister was the IRA owner and if it has been confirmed that the IRA agreement calls for the IRA to be inherited by her estate should you disclaim, the executors of her estate would have to distribute the IRA according to her will. They cannot direct the account to beneficiaries of choice. In this situation, the 5 year rule will apply since sister pased prior to her RBD and the IRA was inherited by her estate. The IRA would be subject to probate of the will, and the will beneficiaries could be assigned individual inherited IRA accounts out of the estate by the executor. Each such account would have to be drained by 12/31/2025.  NOTE: If sister did not have a will, the state intestate rules will determine where the IRA goes.

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