Disclaiming an inheritence
I have a prospect whose spouse passed away on 10/20/2021, at age 55. The deceased had a SIMPLE IRA and his brother is the beneficiary of the SIMPLE IRA. The brother (beneficiary) is over age 59.5. The brother is NOT interested in inheriting the IRA and in fact would like to give it back to the spouse.
Am I right in thinking, if the beneficiary keeps the SIMPLE IRA he will have to take a complete distribution from the account in 10 years? Am I also correct in thinking, if he wants to disinherit the SIMPLE, the spouse, as the executor would be able to claim the IRA as her own and avoid distributions until her age 72?
Permalink Submitted by Alan - IRA critic on Wed, 2022-01-26 01:01
The brother qualifies as an eligible designated beneficiary because he is not more than 10 years younger than the decedent. As such, he can stretch the inherited IRA over his life expectancy, same as if the decedent had passed prior to the Secure Act.
If brother disclaims by the deadline of 9 months after owner’s death, the Simple IRA will be inherited according to the default beneficiary provisions of the Simple IRA as if the brother had pre deceased the SIMPLE IRA owner. The SIMPLE contract needs to be checked to determine what those provisions specify. If decedent’s estate is the beneficiary, who is the beneficiary under decedent’s will or if no will, the state intestate provisions? The executor (spouse) cannot direct the account to herself unless she would inherit under the above provisions.