Stretch Provision without a beneficiary

If a client dies without a beneficiary designation on the IRA, is the stretch provision always lost?

We have a client who is incapacitated. His son has a POA but the POA does not allow for change of beneficiary. Right now there are no beneficiaries listed on the IRA. The custodians document states that in the case of no beneficiary then it will go to the living spouse and then to any living children. In this case there is not a living spouse and only one surviving child. If the client were to die today, will the surviving child lose the stretch provision?



No, the stretch will not be lost in this case.Since the plan provides for any living children to become designated beneficiaries, the proceeds will be paid to his son, and not to the estate. His son will not lose the ability to stretch the IRA using his own life expectancy. In other words, the son does NOT have to be specifically named because he will be identifiable as the only living child of the decedent. The son is fortunate that the estate is not the default beneficiary, because the above benefits do not extend to an estate.



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