IRA 50/50 Beneficiaries , and one disclaims . Also no mention of other beneficiary
I’m pretty sure disclaiming is fairly straightforward process.
Two brothers, named as 50/50 IRA beneficiaries. If one disclaims the other gets 100% of the IRA . Is it as simple as that ?
Originally , this wasn’t the plan , but when the paperwork for the IRA transfer came to me , no mention was made of my brother. I was a sole beneficiary of a ROTH, but the Traditional IRA was a split.
My first thought was that they made some “mistake” in looking at the account paperwork. That may still be the case. But in thinking about it , is it customary for paperwork sent to one of the beneficiaries, to NOT mention any of the others, or the 50% allocation ? That seems a little odd.
I have an account at this custodian, he does not . They made no request for his contact information or asked that he contact them.
That got me thinking about taking full possession of the IRA and passing on cash to my brother in lieu of the ira. Mostly to avoid him having to deal with opening an Inherited IRA account, and bothering with the eventual RMD’s
So, mistake or not, if we choose to go the disclaim route, I suspect that would be the better course, rather than file the paperwork and discover they only give me the 50% as originally planned.
In case the question got lost in this tale, I was wondering if you folks thought there was a mistake made or is this how such things proceed (no mention of other bennies or allocated percent of account ) .
Permalink Submitted by William Tuttle on Thu, 2021-06-10 11:49
A custodian should not provide any information on any Inherited retirement account to anyone except an eligible beneficiary requesting it.
I have been involved in multiple inherited retirement accounts with myself and other beneficiaries. The custodians all have required death certificates and proof of identity to even confirm you are a beneficiary. They would not even provide that information to executors.
Do you have a copy of the decedent’s beneficiary designations?
If the brother really is a 50:50 beneficiary he should be able to submit a claim himself.
It wouldn’t be the first time, retirement account owner didn’t actually follow through with a beneficiary designation plan.
Disclaiming where there is no other beneficiary named is not generally a good idea. It will then go thru the estate with far less favorable distribution options.
Taking distributions and gifting the money to your brother may have other issues. The additional traditional IRA distributions would be taxed at your marginal tax rates. Gift tax reporting could be required.
Permalink Submitted by Alan - IRA critic on Thu, 2021-06-10 15:58
Do you know anything about owner’s estate plan? In some cases, both retirement and non retirement assets are split differently. Your brother could have been left greater than 50% of the non retirement assets and you could have been left with 100% of the Roth IRA to bring the total to nearly equal. Some owners also use tax adjusted considerations in this process. Are you in a higher tax bracket than your brother? If so, the Roth would be worth more to you relatively than to him. A disclaimer should not be pursued without knowing the total picture. Is there an estate executor for the non retirement assets?
Permalink Submitted by Joseph davis on Fri, 2021-06-11 01:41
Thanks for the comments. I handled all the financial affairs of the IRA owner, so I am aware of all designations.Tax considerations might have an impact if all the IRA is taken by only one beneficiary. Not now, but in the future, especially if the withdrawls are made toward the back end of the 10 year Inherited IRA timeframe, the extra monies, will likely push into a higher tax bracket. From the comments above, you seem to think that there was no mistake by the custodian. and the absense of mention of the other beneficiary is customary . At this point , no reason not to confirm this with the custodian, as I am free to either proceed as planned originally (50/50) or do the disclamier thing if so desired. I’ll have to sleep on it