While I am having a hard time understanding why it would be desired – can a trustee of a trust which is named as primary beneficiary of an IRA disclaim the IRA? If so, I am then assuming that the IRA would pass to the named contingent beneficiaries of the IRA. Trying to understand why someone would need to name contingent beneficiaries on an IRA if the primary beneficiary is a trust. -m
That varies from state to state. In some states, a trustee may disclaim, though obviously a trustee would want to get the consent of the beneficiaries before disclaiming. In other states, a trustee can’t disclaim, but a beneficiary of a trust may disclaim.
There are various situations where another beneficiary might come after a trust. For example, you might name the spouse as the primary beneficiary, a disclaimer trust as the first contingent beneficiary (if the spouse survives but disclaims), and trusts for the children (or the issue of a deceased child) as the second contingent beneficiaries (if the spouse doesn’t survive, or if the spouse survives, disclaims as the outright beneficiary, and also disclaims his/her interest in the disclaimer trust).
What are you trying to accomplish (or what was the IRA owner trying to accomplish)?
Bruce Steiner
Bruce,
Not sure what owner was trying to accomplish. He wanted his primary bene to be his testamentary trust and wanted to name a contingent. I couldn’t see why he would need a contingent named on the IRA, since the primary was his testamentary trust. He just seemed adamant about naming a contingent. The contingent bene on IRA were to be the same as the remainder benies on the testamentary trust (after spouse died) – m
Permalink Submitted by Alan - IRA critic on Fri, 2024-05-17 15:45
If the trust provisions are not violated by a disclaimer, the trustee could probably do so under the discretion allowable, and perhaps subject to any state exceptions. There might be potential legal actions by the trust beneficiaries against the trustee for disclaiming. Perhaps the IRA owner transposed the beneficiaries and the trust was to be the contingent.