Need Advice. Inherit or disclaim IRA
I would appreciate any help on this issue. Here’s the situation.
John, husband, dies June 2008 at age 80.
Jane, wife, still alive and in good health. 75 yrs old.
Husband & Wife have 3 living adult children (ages 45, 50, 52)
Both individuals have individual A/B trusts set up. Both live in Pennsylvania.
Jane is named as John’s primary IRA Beneficiary with 3 Children as contingent
beneficiaries in equal amounts.
John dies and leaves $600k in IRA and $2.1M outside of IRA (held in Trust)
Jane , still alive, has $38K in IRA and $2.5M outside IRA (held in Trust)
Jane doesn’t need John’s IRA to live on and is willing to dis-inherit John’s IRA and give to 3 children.
What are the advantages of having Jane disclaim John’s IRA? If her children then inherit the IRA and stretch over their life expectancies, how does this affect Jane’s $2M exemption? Does the exemption get reduced by the amount of the IRA ($600K)?
Your advise is appreciated. Pro’s & Con’s???
Permalink Submitted by Bruce Steiner on Tue, 2008-08-05 23:42
With over $5 million involved, Jane should consult with competent tax/estates counsel, who can give her specific advice based upon her objectives.
Bruce Steiner, attorney
NYC
also admitted in NJ and FL