Disclaiming an IRA

Submitted by Thom Kirer on Wed, 2022-11-23 18:11

i’m very intrigued by the potential strategy of disclaiming an ira such that (upon my passing) it ‘bypasses’ my spouse and sent directly to my kids as contingent beneficiaries. utilizing this process as a means to reduce some state estate taxes. my question revolves around the value of that ira that is disclaimed: will it be valued on the date of death, the date that disclaimer document is executed, or simply whatever dollar amount the primary beneficiary (who disclaims it) sets ?



Submitted by Alan - IRA critic on Wed, 2022-11-23 20:41

Your date of death, and of course that value would not be eligible for the marital deduction if spouse disclaims.

Submitted by Thom Kirer on Thu, 2022-11-24 15:08

Thanks for that.  You’ve kinda answered my follow-up q’s but just want to ask to confirm: i’m assuming the IRS Form referenced above has a section where the value of that disclaimed IRA is reported to go the contingent beneficiaries AND that value is deducted from the deceased spouse’s lifetime allowance; with the end result being the surviving spouse assumes whatever that delta as DSUE.  correct ?

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