IRS Disclaimer for IRA Beneficiary
Where can I find the written inofrmation that is listed by the IRS for the disclaimer on a beneficary for a stretch IRA?
Where can I find the written inofrmation that is listed by the IRS for the disclaimer on a beneficary for a stretch IRA?
Permalink Submitted by Alan Spross on Fri, 2010-04-16 20:51
A disclaimer of IRA benefits must meet the requirements of Sec 2518 per link below:
>>>>>>>>>>>>>>
http://www.fourmilab.ch/ustax/www/t26-B-12-B-2518.html
For the actual wording preferred by your IRA custodian, check with the custodian, but it must comply with Sec 2518.
Permalink Submitted by Bradley Fike on Wed, 2017-06-14 14:15
A married son died with an IRA that still had mom on as beneficiary. Mom wants to disclaim as the beneficiary so the daughter-in-law would receive the money. From what I can tell, the daughter-in-law would be the next of kin to receive it. My question is, would the daughter-in-law be able to roll that to her IRA as a spouse of the deceased even though she was not a direct beneficiary? If yes, then could she make it a spousal inheritated IRA?
Permalink Submitted by Alan - IRA critic on Wed, 2017-06-14 18:45
Who is the default beneficiary in the IRA agreement, son’s estate or his surviving spouse? If it is his estate, what does his will say?
Permalink Submitted by Anonymous (not verified) on Fri, 2010-04-16 22:03
One misconception about disclaiming has always been that the disclaimant can direct the assets to go anywhere. He or she simply gives up the right to ownership and the natural line of beneficiaries will receive the portion disclaimed or it moves down the line to the secondary or tertiary beneficiaries.
pko
Permalink Submitted by Alan Spross on Fri, 2010-04-16 22:19
pko,
I think the “not” should be omitted, right?
Permalink Submitted by Anonymous (not verified) on Fri, 2010-04-16 22:47
I meant that someone who disclaims can not direct the assets to go somewhere else. Not sure if you disagree about that part?
(4) as a result of such refusal, the interest passes without any direction on the part of the person making the disclaimer and passes either –
(A) to the spouse of the decedent, or
(B) to a person other than the person making the disclaimer.
pko
OK, I understand your confusion in the sentence, Yes, you are correct. Fixed.
Thanks.
Permalink Submitted by Alan Spross on Fri, 2010-04-16 22:53
No, I agree. It was just that the statement said that a misconception was that a disclaimant could not direct the assets. But that is not a misconception, it is true. Just a matter of an unintended double negative.
Permalink Submitted by Bruce Steiner on Sun, 2010-04-18 04:20
Each state has its own procedure for disclaimers. The lawyer handling the estate should be familiar with the procedure in the particular state.
Permalink Submitted by Jason Langly on Sun, 2010-04-18 14:32
Also, this is probably obvious to most people on here, but I was unsure before:
If there are both primary and contingent beneficiaries, if you disclaim, then your portion will be spread among the primary beneficiaries only and not the contingent.
Permalink Submitted by Bruce Steiner on Sun, 2010-04-18 14:41
You can set it up however you want. Unless you specify otherwise, if someone disclaims, it’s as if the person disclaiming predeceased the IRA owner. For example, if my beneficiary designation says to A, B, C and D equally, and A predeceases or disclaims, it goes to B, C and D equally. I might do that if A, B and C were my friends. But if A, B, C and D were my children, I’d probably say that if A, B, C or D predeceases, his/her share goes to his/her issue rather than to the others.
But I can do whatever I want. I could say to A, B, C and D equally, except that if A or B predeceases, his/her share goes all to the other, and if C or D predecases, his/her share goes to E. I could even say that if A predeceases, his/her share goes to E, but if A survives and disclaims, his/her share goes to F.
Just make sure you say what you want so that it will be clear to anyone looking at it after you’re dead when no one can ask you what you meant.
Permalink Submitted by Anonymous (not verified) on Sun, 2010-04-18 18:13
I would agree with [i]bsteiner[/i] that there are numerous possibilities to set up beneficiary scenerios, but your options are really best described in the custodian’s disclosure agreement. Or you can just call them and discuss.
The “alternate chains”, as described above, are usually only available for high net worth clients. For example, you may need household asests of 500K or higher. Then you can customize the designation with these types of scenerios. Otherwise, you will probably just have the “generic” option of naming primary and secondary beneficiaries and the disclaiming rules are as [i]cortexmeta[/i] explained.
pko