Bene of Tira Upon Death of Mother
Mother is widowed, has three sons that are the bene. of her tira equally. One son dies, whose has a wife and two sons. Who would get that portion of mothers ira upon her death?
The mother is free to change the beneficiary designations at any time, assuming she remains mentally competent. Therefore, after the death of one son, she can change the beneficiaries to be anything she wishes at that time.
The remaining two sons have power of attorney, so if there are no instructions in the tira about per stirpes of the deceased son, may the remaining sons put that in so the sons of the deceased brother get his share?
- If one son has died, but mother is still living, if the IRA custodian accepts the POA containing authority for the remaining sons to make beneficiary changes, they could add “per stirpes” to their own beneficiary designations, but not for the son who has already died. Instead, they could simply add the specific children of the deceased son as direct beneficiaries. Living sons would inherit 33.33% each, and if the deceased son has two children, each could be listed for 16.67% of the IRA. This must be done before mother passes, as the POA ends at her death.
- If nothing is done and mother passes or has already passed, then each remaining son gets 50% and would establish separate inherited IRA accounts for each. In that case, each son could take some additional distributions and gift the tax adjusted amount to the children of the deceased son, and that would not be too much trouble unless the annual gift exclusion was exceeded. Obviously, continued accounting would be needed to track how much was gifted from each living son’s share of the IRA.
Permalink Submitted by Alan - IRA critic on Thu, 2017-05-11 22:52
For most IRA agreements, the deceased son’s share would go equally to the other two sons. Mother should have listed the deceased son as a per stirpes beneficiary and his share would have passed to his two sons.