I think I know the answer, but I figure it's worth asking (while I also double-check on my own elsewhere):
The sole named beneficiary of a decedent's Roth IRA is considering disclaiming that IRA. There are no contingent beneficiaries named. Does it default to the decedent's estate as beneficiary, and thus be subject to the 5 year rule for distribution? Or does it somehow use state law to establish a new beneficiary, since the estate wasn't actually named as beneficiary, and that new beneficiary can use the 10 year rule, etc. as though they had been named originally? (The decedent in this case left no will, so most of their assets will go through probate and be distributed according to state law.)
Posted by sorator
3 Comments
Defaults to the estate.
Why are you disclaiming?
It will be governed by the IRA custodian’s agreement. Some have default beneficiaries before going to the estate if no beneficiary is named or all named beneficiaries fail (typically a spouse if any, then perhaps children). But most common seems to be that the estate will be the default beneficiary (and payout will be subject to the 5 year rule).