ASSIGNING ESTATE IRA TO BENEFICIARIES
According to PLR 200343030, an estate beneficiary was able to receive share of deceased father’s IRA that was left to estate. She was able to
1.effect a rollover into account titled in name of decedent for benefit of herself
2. arrange trustee to trustee transfer
3. avoid current taxation
4. take distributions over father’s remaining single life expectancy.
This seems like a good deal. However, if I am scrutinizing a post mortem plan including potential disclaimer, the major drawback is that in many instances, the stretch is going to be cut substantially by using the decedent’s single life expectancy.
Is this still good law in 2009? Also, I assume that this is somewhat chancy to rely upon since it is a PLR?
Thanks in advance.
Jim
Permalink Submitted by mk foss on Mon, 2009-03-02 17:35
If the estate is the beneficiary directly or by default because no beneficiary was named or the beneficiary had predeceased, then the decedent’s remaiing life expectancy is as good as you get.
The result in that PLR is not that unusual. I heard Sy Goldberg speak of it at least 5 years before that PLR was issued. Natalie Choate also speaks of it in “the book.”
Permalink Submitted by Alan Spross on Tue, 2009-03-03 00:56
In the subject PLR, the IRA owner passed after the required beginning date, and in that case either the estate or beneficiaries assigned the IRA upon closing the estate would be able to take RMDs over the remaining life expectancy of the decedent. This is not the case where the owner dies before the RBD, where the 5 year rule would apply. Sometimes it is necessary to transfer the IRA to a new custodian in order to allow the estate to terminate without changing the distribution period.