ira beneficiary “as per will”

Submitted by Deborah Marez on Thu, 2009-01-29 21:39

What will happen to an ira after death, if the account holder listed specifically on the beneficiary designation form “as per will?” Will it be distributed per these wishes?



Submitted by mk foss on Thu, 2009-01-29 22:07

The answer could vary from state to state but this would not meet the definiton of a “designated beneficiary” – the other problem is that IRAs do not go through probate because a beneficiary is named. I think with this situation there would be the costs and time delays associated with probate as well.

An estate/probate attorney in the state of residence should be consulted.



Submitted by Bruce Steiner on Fri, 2009-01-30 00:05

Did the IRA owner attempt to specifically bequeath the IRA in his/her Will?



Submitted by Deborah Marez on Fri, 2009-01-30 03:44

Thank you for these responses.

To give more information: the will does not state the ira specifically. What it does specify is 1)one lump payment, 2)a share of home/property, and then 3)”I will, devise and bequeath the rest, residue and remainder of my estate, both real and personal, and wherever situate…

The intent and understanding of all involved was that the ira was included, along with other accounts, in #3. Is it? If not, can anything be done about it? Also, I am in the state of NC. Thank you so much.



Submitted by Alan Spross on Fri, 2009-01-30 04:08

Two more questions:
1) What was IRA owner’s age at death?
2) Is a surviving spouse the only will beneficiary and is the surviving spouse the executor of the will?

Also, perhaps Bruce will expand on the potential effect if the IRA HAD BEEN specifically bequeathed…



Submitted by Deborah Marez on Fri, 2009-01-30 04:40

The IRA owner was my dad, who died at age 68. Per the will, his spouse is to receive the lump sump payment. They purchased a house together while not married. His half of the house is to be included in the residuary estate, but she gets to stay there as long as she is alive (“subject to the life estate of”). They were together for a few years, but just got married 2 months before my dad died. Everything else was to go to his children. They created copycat wills a few months before he died–they both left each other a lump sum, and everything else went to their children. She is the executor of the will. A large part of my dad’s estate is the IRA, but it looks like it may be headed her way, which was not my dad’s wish.

Thank you; I am grateful for any assistance.



Submitted by Bruce Steiner on Fri, 2009-01-30 14:09

It’s hard to tell from the original poster’s summary of the Will what the terms of the Will are, and whether it may be possible for the spouse to accomplish a rollover. He/she should consult with tax/estates counsel, who can review the Will and advise him/her accordingly.

In response to Alan’s question, there has been some discussion over the years as to whether a specific bequest of the IRA in the Will (for example, “I bequeath my IRA no. 123456789 at X Bank to my daughter, Susie, if she survives me” would have any effect, (i) if there is a prior inconsistent beneficiary designation, (ii) if the IRA passes to the estate under the beneficiary designation or the default provisions of the IRA, or (iii) if, as in this case, the beneficiary designation says “per my Will.” From the original poster’s summary of the Will, that does not appear to be the case here. So that question can wait for another day.



Submitted by Denise Appleby on Fri, 2009-01-30 16:14

I recall a case some years ago; where a court ruled that the provisions of the will could be applied to the IRA. The IRA had “as per will” or something similar, and the will referenced the IRA by account-number and the custodian with which it was held. The beneficiaries took the matter to court and the judge ruled that the will was specific enough. As a result, the individuals named under the will were treated as the beneficiaries of the IRA by the custodian- for purposes of tax reporting.

The question then becomes, which life expectancies applied. Even in cases where the IRS have ruled that the beneficiaries of an estate can be the beneficiaries of the IRA for tax reporting purposes- when the estate was the named beneficiary, these beneficiaries were not permitted to be treated as designated beneficiaries.

A PLR was issued on this maybe a month or so ago. Of course, I can’t find it now, and I don’t recall the specifics of the ruling, other than it said “as per my will” is not a valid beneficiary designation. I don’t recall if that resulted in the default beneficiary provisions applying.



Submitted by Deborah Marez on Mon, 2009-02-09 04:48

Thank you so much for all of your responses. I wonder, though, if my father listed “as per will” on his beneficiary designation form, and this is not what happens, is there not some accountability? If he submitted his form to the IRA account holder, and they accepted it with this designation, and did not tell him that it was an unacceptable designation, can they not be held accountable? It was my father’s wish that the IRA be distributed per his will, yet the account holder is not willing to uphold this. Is there anything that can be done to make sure that my father’s wishes are respected?



Submitted by Jose Morales on Mon, 2009-02-09 16:54

If the IRA custodian had known that “as per will” was a less than ideal beneficiary designation, it would have been really great customer service to inform your father that he may want to be more specific with his beneficiary designation. Is there any financial liability that can be placed on the IRA Custodian for not doing this, if they had known? Not likely. Any IRA forms that your father would have signed to either open the account or designate a beneficiary will have an acknowledgement that the individual understands the need to consult with an appropriate advisor on these matters, and that the appropriate advisor is NOT the IRA Custodian.

From my own experience, I have on many occasions had situations at our offices escalated to me when an individual insists on a less than advisable beneficiary designation and our office personnel attempt to have the client name a more appropriate beneficiary. Very rarely have I ever been able to change anyone’s mind in these situations. It very well could be that someone did point out to your father that “as per will” may not be the best beneficiary designation and he insisted on keeping it listed that way regardless. Do not be surprised to find this out if you really want to place any financial liability on the IRA Custodian.



Submitted by Denise Appleby on Mon, 2009-02-09 17:34

That reminds me…the PLR 200846028



Submitted by Bruce Steiner on Mon, 2009-02-09 19:49

In PLR 200846028, as in this case, the testator did not leave the IRA to anyone. We’ll have to wait for another day to find out whether that would have made a difference.

I don’t think the financial institution should provide any advice as to who the IRA owner could or should designate as his/her beneficiaries. I think they should simply date stamp whatever beneficiary designation the IRA owner submits.



Submitted by Deborah Marez on Mon, 2009-02-09 20:12

Thanks. I’m not suggesting that they be financially liable, but perhaps uphold the IRA holder’s wishes that the IRA be distributed as noted in his will. Also, in all my searching on the internet, I have found many articles stating that if an IRA account holder designates “as per will” on the beneficiary form, that it is treated as if no one was listed, or it was left blank. And in the event of a “blank” form, then the IRA would pass through the estate. Any thoughts on that?



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