Estate as IRA Beneficiary
Please advise,
I am taking over an IRA from a friend of mine who passed away recently. I did not open the IRA but I am transferring it to my broker dealer per the wishes of the family. From what I have learned from you and the Savvy IRA Planning book I got from you, the old broker, who I won’t name, did them no favors as they listed the estate of the deceased as the beneficiary. The deceased died at age 42, well before his RBD. He is divorced, and I know from his life insurance and living trust, that he wanted the proceeds to go to his sons, aged 18, 16, and 13.
What is the best scenario I can paint for this situation? If I am correct, based on my reading, due to the fact he died before his RBD, and being as he named a non designated beneficiary, this IRA account must be distributed within the 5 year rule?
How would you advise dispersing the funds to young men at this time?
Thanks
Permalink Submitted by Alan - IRA critic on Thu, 2018-01-11 17:53
Yes, the 5 year rule applies here. Did the decedent have a will, and are you the executor of his estate?
Permalink Submitted by Tony Paper on Thu, 2018-01-11 18:34
I am not the exucutor. He named a firend in his will as the trustee. And all that has happened is a bit over his head as he didn’t even know he was the trustee. He was a wealthy farmer who didn’t plan very well.