Inherited IRA, Executor Wants to Hold Funds - PA

Submitted by Lorraine Russell on Mon, 2017-08-07 01:45

My relative lives in PA. I believe I am listed as a beneficiary on an IRA (or multiple IRAs) or some other Vangard account. The executor is stating that he wants to save the money to pay medical bills. (the executor is in the process of selling the decedant’s residence which will be part of probate). He will not provide a death certificate or the relative’s SS #. If the estate is not listed as the beneficiary, can the executor withhold the information from me,as a listed beneficiary? How do I get this information? Can I go around him and file the necessary paperwork – if so will he or the estate be notified funds have been taken out of the 401K as an inherited IRA? Can the executor take more than the funds he, as a beneficiary is entitled to? Should I advise the executor’s attorney of such?

I understand the IRA would be transferred to an Inherited IRA account, etc.

I also believe I may be listed as a beneficiary on an insurance account or multiple accounts from an insurance company, although the executor is only stating there may be one small policy.

Can I do anything without the executor’s approval? Or must I sit and wait for him to take action? How do I get him to understand the IRA and insurance policies are not subject to probate? Or am I mistaken in the above?

Thank you in advance.

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Permalink Submitted by Ben Meyer on Mon, 2017-08-07 03:56

If the executor, or personal representative, has been appointed by the probate court, he will be required to file an inventory with the court, and also the will must be filed with the Register of Wills for the county in Pennsylvania. These are usually public documents. Filing of the inventory is required within nine months of appointment of the personal representative. Depending on state law, the executor must provide all legatees mentioned in the will with certain information. You can obtain the documents from the court, although this might require a personal trip to the court clerk office. They might also fill your request by mail if you are located in a different area. It is also possible that the probate court may have a website with information available, possibly including downloads. What is the PA county?
You are able to request your share of the IRA accounts directly from the IRA custodian. The executor won’t be involved at all with transferring the IRA accounts to the IRA beneficiaries. The custodian may already have a death certificate. If they ask you to furnish a death certificate you should be able to obtain one, since you are a relative and an interested party. This is probably available from the town, city, or county where your relative lived or passed. There will be a nominal fee for a certificate, and also any court copies you request. The SS number is likely to appear on the death certificate. The executor cannot use the IRA account for medical expenses unless the IRA named the estate as the beneficiary, or as one of the beneficiaries. The proceeds from the sale of the residence can be used for the medical bills of the decedent, and for any other valid debts.
Having the cooperation of the executor would be highly desirable. Hopefully you can establish an amicable relationship. You will need some information from the executor about the IRA, such as whether the RMD, if any, has been taken for the year of death, and how much of it you should withdraw. You will also need to receive information from the tax return of the decedent pertaining to the basis, if any, that may be contained in the IRA. This would be disclosed in a form 8606 filed with the tax returns of the decedent. Several other facts should also be disclosed to you regarding the IRA, either from the executor or the custodian, such as whether any charities are also beneficiaries, and when they received their separate inherited accounts, since this may have an effect on the schedule of required distributions that pertains to you..
The situation with life insurance is similar. The insurance company will send any benefits only to the beneficiaries. They may even refuse to speak with the executor if he or the estate is not one of the beneficiaries.
Pennsylvania has an inheritance tax that might apply to an inherited IRA. It applies if the decedent was over 59 1/2 for a traditional IRA, or to the basis if the account is a Roth IRA, or if the decedent was disabled. Other rules may also apply. Coordination will be necessary with the personal representative if the tax applies.

Permalink Submitted by Lorraine Russell on Mon, 2017-08-07 13:36

i was reasonably sure my research was correct as I administered my parents’ estate. Figuring someone will speak up about this issue soon as I would like to check my beneficiary status. I know being an executor is not an easy task. People need to think about whom they select to do this task as it isn’t easy. One needs to know what passes through the estate and probate and what doesn’t. The one beneficiary is into finance so I am hoping he takes the lead.

Permalink Submitted by William Tuttle on Mon, 2017-08-07 15:57

I don’t know if this will work in PA, but in my state, the clerks are the power behind the throne “so to speak.” If you are unable to get cooperation from the executor/personal administrator, they may be an avenue short of involving a lawyer.
I was aquainted with a similar situation. A call to the probate court clerk’s office resulted in a swift admonition by that office to the excutor about reponsibilities, lest they wanted to be summoned before the Judge.
In my state, you almost never appear before the judge, unless there is a contested will or other serious issues. The clerks handle evrything and only actions requiring a judge’s order are presented to the judge.