IRA

Submitted by hank suskiewicz on Thu, 2013-05-30 17:09

Spouse has an IRA. Spouse dies and husband doesnt notify custodian of this because he is primary bene and children are contigents. Husband dies and now children want to transfer theri portion into an IRA. Custodian says no, and that all the money has to go into husbands estate account.
Is this correct?

Thanks



Submitted by Alan - IRA critic on Thu, 2013-05-30 17:42

  • Yes, since the husband did not name his own successor beneficiary, the account goes to the entity indicated in the IRA beneficiary provisions. In a few cases, this would be the children, but in most cases it is the spouse (already deceased) or the estate of the beneficiary. In this case, the IRA agreement provisions should be examined to make sure that it is the estate. The provisions could also vary depending on whether the husband is considered the beneficiary OR if by not taking an RMD required of the spousal beneficiary he became the default owner of the IRA. Check if husband missed any RMDs required as beneficiary and became the default owner.
  • There is another possibility as well. It may be possible for the executor of husband’s estate to disclaim his interest post death as that would result in the children contingent beneficiaries inheriting. But any disclaimer must be completed within 9 months of wife’s death and it may now be too late for this.

Submitted by Bruce Steiner on Thu, 2013-05-30 19:15

In some states, an executor needs court approval to disclaim, so if that’s a possibility, the husband’s executor should allow sufficient time to obtain court approval, if needed.Bruce Steiner, attorney, NYC, also admitted in NJ and FL

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