IRA with estate named beneficiary!
I have inherited an IRA with the estate as the beneficiary. If I want to take the lump-sum distribution. Will I need to get a Tax ID # for my mother’s estate, so the custodian can pay out the lump sum distribution to my mother’s estate or do I use my social security number.
The check is going to pay to the esate of my mother
Your help is most appreciated.
Sincerely
Permalink Submitted by Alan Spross on Fri, 2007-08-10 04:15
Apparently, you are the executor. You have a choice here depending on the IRA balance, remaining RMD requirement based on your mother’s age at her death, and your desire to take advantage of the remaining tax deferral benefits.
That option would be having the IRA account assigned to you. That would allow the estate to be terminated, and if there is no other income or IRD coming into the estate, could enable you to avoid getting an EIN or perhaps even filing a 1041 return. Attached is a link explaining more:
http://www.ataxplan.com/bulletinBoard/ira_providers.cfm
Permalink Submitted by kathleen Lane on Fri, 2007-08-10 15:15
the questions I have is:
when the estate is the beneficiary–who becomes the real named beneficiary.
If the person who died has a will–I thought the residuary beneficiaries named in the will would inherit the IRA..
If the person who owned the IRA did not have a will–the state laws of intestate succession would determine the beneficaries.
Doesn’t this have to happen first–before the person can decide what options exist with the IRA
Permalink Submitted by Alan Spross on Fri, 2007-08-10 22:49
Kathy,
You are correct. If the estate is either the default beneficiary under the IRA agreement because there was no designated beneficiary, or the owner simply named “my estate” as benficiary, then the will is subject to probate with the will beneficiaries entitled to inherit. If no will, then state intestate provisions determine where the IRA goes.
In the prior post, I assumed that the poster was both the executor and the sole beneficiary under the will per the wording of the post. In any event the executor, in some cases the probate court, and the IRA custodian must have resolved any doubts over who the IRA is being assigned to before it can be assigned. If the will has a “per stirpes” or other complicating beneficiary wording, the IRA custodian is going to hand on to the money until they are sure all beneficiaries are identified to reduce any chances of litigation.