The issue is the spouse is alive, but incompetent and unable to designate beneficiaries on the inherited IRA. Having secondary or contingents on the decedents IRA does nothing to address this since the primary was alive and was able to inherit.I would fix it by designating the spouse as primary, and the children (or whoever) as secondary or contingent. You would even list them all as primary with different percentages (eg. spouse 90%, Kid1 5%, Kid2 5%) because the account would be then divided between Kid1 and kid2 if Spouse is dead. People just need to spend a few more minutes setting this stuff up....This can’t be an uncommon issue. One spouse dies and the other is incompetent in some form. How does one prevent this issue? Typically IRAs are left via beneficiary, and I’m assuming you can’t designate a beneficiary of an inherited IRA before the decedent dies?
The only way around this I can see is to have someone else as a power of attorney for the spouse, with the specific clause included that the POA can designate beneficiaries. Obviously that is a great deal of trust to put in a POA, unless one intends for the person with POA power to be the sole beneficiary.
Statistics: Posted by JBTX — Mon Oct 14, 2024 11:26 pm — Replies 10 — Views 584