Death of IRA beneficiary
Good Morning,
My client passed away with an I.R.A. at UBS (formerly PaineWebber) which designated his 3 children as the primary beneficiaries; however, client’s son had predeceased him.
I have the client’s beneficiary designation form and it is silent on what happens to the I.R.A. share of a deceased beneficiary.
Also, I spoke with the UBS advisor/custodian, and he advised that the plan is also silent as to what happens to the share of the deceased beneficiary.
So, it is my understanding that I should research Massachusetts law as to the deceased son’s share of the I.R.A., correct?
Thank you,
Susan
Permalink Submitted by Alan - IRA critic on Tue, 2013-04-02 18:26
I would have the plan rechecked to be sure it is silent. Usually, the 2 living beneficiaries would have their shares ratably increased unless the client designated “per stirpes” or similar verbiage that indicates the intent for a deceased beneficiary’s share to pass to the issue of the deceased beneficiary. It’s possible that MA law states differently and if it does, then MA law would prevail since the IRA agreement cannot override state law unless the state law permits it. Quite often a situation like this presents problems for the remaining beneficiaries that they can address either by disclaimers or gifting subject to the annual gift exclusion if they want to change the direction of part of their shares.
Permalink Submitted by Susan Grady on Tue, 2013-04-02 20:24
Thank you, AlanI called UBS again and the advisor said he will re-check the plan and get back to me. Still looking into MA law and any insight I learn, I will post.Best regards,Susan
Permalink Submitted by Bruce Steiner on Wed, 2013-04-03 00:30
I would look at the IRA agreement rather than relying on the broker’s explanation of what it says.