IRA Disclaimer
Multiple primary beneficiaries, -one primary disclaims
Does the amount of his/her disclaimer go to the remaining primary beneficiaries? Or does it go to the contingent beneficiary?
Separately, if there is no contingent beneficiary and primary beneficiary disclaims does it go to the estate? Or do it depend on the IRA custodial agreement language?
Thank you
Permalink Submitted by Alan - IRA critic on Wed, 2020-08-26 17:27
The IRA beneficiary clause needs to be carefully checked. For most contracts, the funds will go to the contingent beneficiary of the disclaimant as long as the contingent was clearly named. If there was no contingent, those funds would usually go to the other primaries. So check the agreement carefully before filing a disclaimer and be sure the disclaimant does not do anything to take possession of their share. Better not to name their own beneficiary in the meantime as that could invalidate the disclaimer.
Permalink Submitted by David Mertz on Wed, 2020-08-26 20:19
I’m under the impression that IRA agreements usually state the opposite, that if one primary beneficiary predeceases or disclaims, that beneficiary’s share will go proportionately to the remaining primary beneficiaries (unless, perhaps, the beneficiary was designated as being per stirpes and the disclaimed share goes to the disclaimant’s issue) and would not go to contingent beneficiaries unless there were no remaining primary beneficiaries. Still, the IRA agreement must be examined to determine which treatment applies.