IRA distribution options when owner passes
If an IRA did not have a beneficiary named when the owner passed what are the options? Can the court appointed personel rep move these funds into inherited ira’s?
If an IRA did not have a beneficiary named when the owner passed what are the options? Can the court appointed personel rep move these funds into inherited ira’s?
Permalink Submitted by Al Fry on Mon, 2010-06-28 17:45
I believe the first step is to check the IRA Custodial document to see if there is a default beneneficiary.
Permalink Submitted by mk foss on Mon, 2010-06-28 17:49
When there is no beneficiary listed for an IRA – a default beneficiary is provided for in the IRA custodian’s adoption agreement. Often the default beneficiary is the IRA owner’s estate but it may be the surviving spouse (if there is one) or children.
When the estate is the default beneficiary the account must be probated – and the court appointed personal representative would handle the IRA. The rep may not be empowered to do that until the court allows it. There are PLRs that approve the IRA being distributed to the estate beneficiaries. However, the beneficiaries cannot use their own life expectancies; the five-year rule (if the owner was not required to take RMDs) or the decedent’s life expectancy from the single life table are used to determine the payout period for all estate beneficiaries.
Permalink Submitted by Bruce Steiner on Tue, 2010-06-29 21:00
You probate the Will, not the assets. Once an executor, administrator or personal representative is appointed, he/she should be able to do whatever is appropriate.