Changing benificiaries after death of account holder
Have a bit of a complex situation I’d like some advice on. My father had my sister and I listed as 50/50 joint beneficiaries of his Roth IRA account. I was a joint US/Canadian citizen living for many years in Canada. I decided to renounce my US citizenship as didn’t want to deal with the tax complexities of dual citizenship. My father was worried about falling afoul of the IRS so he took me off as a beneficiary until I had finished my renunciation. However a few months after he did that he passed away(in Dec 2018). So my sister became sole beneficiary of the account at that time. Ed Slott’s book seems to say that it’s possible to add my name back on as a beneficiary even after the death of the original account holder? (On page 200 of his 2012 edition of his IRA book which my father gave me). Is that possible?
Permalink Submitted by Alan - IRA critic on Fri, 2024-08-16 17:34
I don’t have the book, but you cannot backdate a beneficiary designation unless there was clear custodian error with respect to the beneficiaries. Your sister could add you as successor beneficiary on her inherited IRA from here on, but this would not be retroactive. She could also take some distributions and gift them to you and apply the annual gift exclusion of 18,000. If she does that (no obligation), she will have to pay the income tax on the extra distribution, so she might gift you a tax adjusted amount.
It is too late for her to disclaim any portion of the IRA now since that deadline was 9 months after the date of father’s death.
Would be interested in what the book says if you can provide further info.