IRA beneficiary children vs. spouse

Submitted by Brian Smith on Fri, 2018-01-12 23:09

Hi:

IRA holder passes. Survivors are a spouse and children.
IRA had the children as beneficiaries.

The couple’s intentions were spouse as primary and then children as contingent.

Can the children disclaim the asset and then have it go to surviving parent? If so then can the surviving parent move into their own IRA or Inherited IRA?

I believe the will had things set up to go to the spouse first and then the children second and I think other assets (home, banking accounts, etc) were titled Jointly.

Looking for a way to help the surviving spouse.

Thank you for your assistance.



Submitted by Alan - IRA critic on Fri, 2018-01-12 23:51

  • If the children disclaim, then the estate is the beneficiary and spouse would have to depend on past PLRs allowing the spouse to roll over the IRA as spouse’s own IRA. There is plenty of precedent for that if spouse is the sole primary beneficiary in the will, and even better if also the executor of the estate. Several IRA custodians might allow the spouse to make this rollover, although there may be a few that ask for the spouse to get their own PLR. This becomes more complicated if there is  no will and spouse must depend on state intestate provisions, but it still might be doable.
  • The IRA agreement should always be checked to see if the spouse might be the default beneficiary if the children disclaim. A few agreements contain that provision and it would make things simpler.

Submitted by Brian Smith on Mon, 2018-01-15 01:44

Alan:Thank you for your reply, I appreciate it.  You referred to past PLRs and I was wondering how I could find them?  I tried to seach IRS website and general search but no luck.Also, you mentioned there might be several custodians that would allow the spouse to make this a rollover.Does this potentially mean if the current Custodian is not cooperating, we might be able to find another Custodian that would accept the funds as a spousal Rollover into an IRA for the spouse?Thank you,Brian

Submitted by Alan - IRA critic on Mon, 2018-01-15 02:40

http://www.kkwc.com/attorney/bruce-d-steiner/Yes, a direct transfer to a new custodian is possible if you can locate a new custodian who will allow the spouse to do a rollover of the inherited IRA. The above link (4th article from the end of the list) contains an article referencing some PLRs of interest.

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