Court order for IRA Distribution
We have a client who passed away in ’07, unmarried and without a beneficiary designation. The custodial agreement the IRA was held under declared that the default beneficiary was the decedant’s estate. After a little over a year, the court has determined who should receive the assets and in what amount.
It is my understanding that these assets are no longer qualified and [b]cannot[/b] be placed in a beneficiary IRA. The clients have asked me to confirm that position as they believe that they can distribute the assets from the estate and “roll” them into a beneficiary IRA.
Any assistance would be appreciated.
Thank you!
Permalink Submitted by Alan Spross on Tue, 2008-06-24 23:16
Alanna,
It is often possible to get the IRA assigned to the beneficiary when the estate is allowed to terminate under the probate court jurisdiction. However, this does not in any way extend the RMD distribution period, which is still based on a non individual beneficiary, the estate. Assets that have already been distributed from the IRA to the estate cannot be returned, so this only works if assets remain in the IRA when the estate terminates. The IRA custodian may also be changed by direct transfer, but any distribution cannot be rolled over. See attached link to an article on this by Natalie Choate:
http://www.ataxplan.com/bulletinBoard/ira_providers.cfm