IRA with No Beneficary Designations

Submitted by Linton Banwell on Tue, 2023-08-22 20:05

Husband passed in 2014. We created spousal IRAs on all the deceased husband IRAs. We set up beneficary designations on all the spousal IRAs to be divided between six chidren evenly. The spouse passes in 2023. Come to find one of the IRA companies never processed the beneficary change. The personal representative of the estate (State of Michigan) wants to make sure the assest of this are evenly divided with his sblings. How do we handle this situation?



Submitted by Alan - IRA critic on Tue, 2023-08-22 20:32

Is there a will of the surviving spouse? First, this particular IRA beneficiary provisions should be checked to determine if there is a default beneficiary other than the estate, although the estate is the most likely beneficiary. If so, the PR must adhere to the will provisions and if no will the state intestate provisions, which could result in the IRA passing equally to each child. Inherited IRAs for each child could then be distributed out of the estate allowing the children to manage their own inherited IRAs. If the surviving spouse passed post RBD and the estate inherited the IRA, the distribution period for those inherited IRAs is the remaining LE of the decedent based on the decedent’s age in 2023. 



Submitted by Linton Banwell on Wed, 2023-08-23 18:20

There is a will and trust.  One son is the Personal Representative (Michigan) and Trustee of the Trust.



Submitted by Alan - IRA critic on Wed, 2023-08-23 18:46

  • The IRA must pass under the terms of the will. If those terms are unacceptable, use of qualified disclaimers or partial disclaimers by the will beneficiaries might aid in equalizing the IRA death benefit.  Even if there is a pour over will transferring the IRA to the trust, the RMD rules are not affected since the trust was obviously not specifically enumerated on the IRA beneficiary clause, but disclaimers could be used by the trust beneficiaries as in the same manner. There is a 9 month deadline from the DOD to file any disclaimers. 
  • I assume that there was no sufficient documentation available to get this IRA custodian to further research the beneficiary failure.


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