IRA beneficiary
From: [email protected]
If Sandra, my spouse, is named the primary beneficiary of my (Robert’s) IRA, and the children named as equal secondary beneficiaries, and on my death Sandy disclaims her interest within nine(9) monthes, and does not roll it over as her IRA, could it be passed as a stretch IRA for the secondary benefiaries i.e., the children?
If my (Roberts) IRA is added to the amount of the Credit Shelter Trust created at the time of my demise, can the estate tax limit be preserved by passing the IRA to the secondary beneficiaries, as stated above?
Thanks
P.S. Ed, I saw your TV show on on Wednesday 5/29 on WXEL in West Palm Beach, and thoroughly injoyed it.
Permalink Submitted by Bruce Steiner on Fri, 2008-05-30 21:23
If Sandy disclaims, it’s as if she did not survive you. It goes to the contingent beneficiaries. If your children are the contingent beneficiaries, they can stretch it out over their life expectancies. If the credit shelter trust is the contingent beneficiary, then, depending upon the terms of the trust, the trustees can stretch it out over the life expectancy of the oldest beneficiary of the trust. In either case, it will count as part of the $2 million estate tax exempt amount.
Bruce Steiner, attorney
NYC
also admitted in NJ and FL
Permalink Submitted by [email protected] on Wed, 2008-06-04 22:30
Client has two IRA account. One at mutual funds, one at annuity company. Contingent bene at mutual fund account are listed by name.
Contingent on annuity account is a living trust. Shouldn’t they be the same? Pros and cons?
Permalink Submitted by Alan Spross on Wed, 2008-06-04 23:05
There is no need for them to be the same, the actual question is whether this accomplishes what the client wants and if client’s current plan calls for any change.
Perhaps the primary beneficiary is not the same either? If the primary beneficiaries are the same, perhaps the client feels that the named contingent beneficiary is better served receiving the account outside of trust. Perhaps that contingent does not get along with the succesor trustee or is so much younger his stretch could be eroded by making him a trust beneficiary. Could be any number of variables here.
This could also have been part of an estate tax strategy. I guess you should ask what client is trying to accomplish and see if the current structure is appropriate.