Death of owner of Qualified Plan Assets with no Beneficiary Form on file with Custodian
I have an situation I am trying to help former spouse(not married to owner of an IRA rollover, SEP and Roth held with a well known custodian prior to passing last year) She is the “personal representative” on his estate) and she is trying to get the proceeds to her two children to elect inherited IRA status rather than proceeds going to his estate since the custodian is telling us proceeds from all three accounts will go to his estate. The custodian of the plan assets for a Roth account, SEP and IRA rollover is providing account history but we are requesting to see original account paperwork to include the beneficiary form that would have been completed and we are told they need a court order to provide this.
There should be plan docs available for the SEP but what about Rollover IRA and Roth? Would it be wise to look at the IRA custodial agreements to determine what is done in the case of not listing a beneficiary IF this is the case? Seems like the custodian would have required some type of beneficiary disclaimer he would have had to sign even though he was single at the time.
Any advice would be greatly appreciated.
Permalink Submitted by Alan - IRA critic on Mon, 2018-08-13 18:10
The beneficiary provisions of a decedent’s plans should always be carefully reviewed, because sometimes the administrators do not know what is contained in these provisions. That said, if decedent was single, his estate will almost always be the default beneficiary and as such his will would determine the beneficiaries. If no will, then state intestate statutes. This is a frequent problem as there is no formal requirement to name a beneficiary on retirement plans or to warn the participant about the consequences of not naming one. Note that regardless of decedent’s age, for Roth IRA beneficiary RMDs he passed prior to his RBD, so the 5 year rule will apply. For the other two accounts his actual age at death will determine the beneficiary stretch period. Since these plans are all IRAs, if the estate is the beneficiary as expected, the executor will be able to assign the accounts to separate inherited IRAs for each beneficiary, although that will not change the RMD distribution period.
Permalink Submitted by Bruce Steiner on Sun, 2018-08-19 01:10
Check the beneficiary designation. If there isn’t a beneficiary designation, check to see if there’s a default beneficiary under the plan.