According to this article, if there there isn't a "designated" beneficiary, you may not get to stretch the IRA under the IRS guidelines. The custodian can choose to make a taxable distribution to the estate. This could all have been avoided if the father designated the two children as contingent beneficiaries to his IRA. Another reminder to update the beneficiaries + contingent beneficiaries on your accounts!
https://irahelp.com/slottreport/there-n ... -now-what/However, the ability to stretch distributions when the estate is the beneficiary may not be an option for you. Many IRA custodians will only make payments to the estate NOT to the beneficiaries of the estate. While IRS allows an estate to assign or transfer the IRA out of the estate to a properly titled inherited IRA for estate beneficiaries, many IRA custodians will not do this, instead paying the entire IRA balance to the estate. This is a taxable distribution and cannot be undone.
Statistics: Posted by wangle — Fri Oct 11, 2024 11:11 pm — Replies 7 — Views 436