Estate as IRA Beneficiary with Multiple Beneficiaries of the Estate | Ed Slott and Company, LLC

Estate as IRA Beneficiary with Multiple Beneficiaries of the Estate

A 93 year old passed away just after taking his RMD. He named his estate as beneficiary and his will indicated his residuary estate be divided between 4 family members (all non-spouse beneficiaries, but not all equal beneficiaries). The custodian has accepted the terms of the will and will allow them to set up Inherited IRAs for the four of them so they can each control their own investments, but still take out the RMDs based on the remaining life expectancy of the deceased IRA owner.

A provision of the will, which I copied and pasted below, states that one of the beneficiary's share (a 30 year old nephew) should be put under control of one of the other beneficiaries (the 30 year old's 65 year old mother); however, if that gets implemented then the 65 year old would then have her share AND her son's share all in her Inherited IRA, which means she would have to pay the tax on the RMD at her tax rate (she has a high level of income), and then disburse funds to her son. Based on the verbiage below, do you think she would be permitted to "disclaiim/release control" of her having to control that account and instead just have the 30 year old's share go directly into an Inherited IRA for him so HE can take the RMD and pay the tax at HIS lower tax bracket (he has very low earned income)?

****In the divisions to be mode under Subsections a and b above, I have included the one-ninth share, as the ease may be. for my great nephew. 30 YEAR OLD JON SMITH, within the share of his mother. 65 YEAR OD JANE SMITH, for her to
hold for his benefit and disburse or hold as she determines in her discretion for his best interests.****

Thank you!!

Controlling an account does not mean that the person must own it. Perhaps something like an irrevocable POA, if available in beneficiary's state, would be suitable.

She need not serve as trustee.  Who is named as her successor?


Find members of Ed Slott's Elite IRA Advisor GroupSM in your area.
We neither keep nor share your information entered on this form.

I agree to the terms and services:

You may review the terms and conditions here.