Fish-Weekly t1_jaafri1 wrote on February 28, 2023 at 12:39 AM

Reply to comment by 1955photo in Trying to dispense an inheritace and a company is making it difficult. how can we resolve this? by Jack_of_Spades

Yes - beneficiary designations on the account supersedes the will. One option you might have would be for your mother to disclaim $200k of the inheritance. That $200k would then be distributed per the will to you and your brother. The lawyer who drafted the will should be able to advise you as to whether this could be an option to accomplish what you are wanting.

I don’t fully understand the tax issues you were trying to avoid. Are you and your mom just thinking you would all just cash out the IRA and pay taxes on the full amount? That is typically not the best way to handle an inherited IRA. A better way is to have an inherited IRA account set up for each beneficiary and then take the minimum distribution every year. Your mom, being the surviving spouse especially, has many options to defer paying taxes on these funds. You and your brother would have to withdraw and pay taxes over a 10 year period per the Secure Act:

https://tickertape.tdameritrade.com/retirement/inherited-ira-secure-act-stretch-provision-16710

1955photo t1_jaakf5u wrote on February 28, 2023 at 1:14 AM

The beneficiary designation keeps the account out of the estate. It's not a process, like you can disclaim something in a will

Fish-Weekly t1_jaancbd wrote on February 28, 2023 at 1:35 AM

A beneficiary can disclaim all or part of an inherited IRA, allowing it to pass either to contingent beneficiaries or if none present, to the estate and then distributed per the will.

1955photo t1_jaaok1f wrote on February 28, 2023 at 1:44 AM

I was not aware of that. But Ameritrade is going to require some kind of legal document to handle it. It's possible there are no contingent beneficiaries and the will leaves everything to the person who was originally the beneficiary, and then the beneficiary will have to disclaim part of the estate. Seems a convoluted process for no real reason.

OP needs to get the facts about taxes on this account, which he seems to think must be paid in one year.

Fish-Weekly t1_jaatodd wrote on February 28, 2023 at 2:22 AM

It sounds like the will directs the money to be distributed as desired, but I agree with you that I don’t fully understand what the OP is trying to accomplish here from the taxation angle. Worst case, the surviving spouse can assume the IRA as their own and depending on age, let it continue to grow or take minimum RMDs for their lifetime.