Estate as IRA Beneficiary; Estate Goes To Charity
A client’s parent passed away at age 82
The $300k IRA had the beneficiary listed as Estate
Estate/Will 100% goes to a charity
What kind of pain is caused by the charity not being listed directly? Must the estate distribute directly to the charity and generate taxable income for the estate or can the charity directly open an inherited IRA to receive the IRA and thereby have a nontaxable emptying of the IRA assets?
Thank you
Permalink Submitted by Alan - IRA critic on Sun, 2019-03-10 23:04
The executor should be able to assign the IRA to an inherited IRA for the charity, although the estate might have to receive a distribution to pay debts of the estate if there are not other assets to do so. If the IRA custodian does not cooperate, there are two choices. Either transfer the estate inherited IRA to another custodian who will or accept a distribution from the IRA and pass it through the estate and file a 1041 using the charitable deduction. Assignment of the inherited IRA to the charity is simpler and the charity can then request a lump sum distribution.