Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

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Monday, January 13, 2014

IRA Inheritance Issues

Ira

IRA inheritors are likely to miss key deadlines when the IRA owner dies without leaving adequate records of their assets.

IRA owners must fill out beneficiary designation forms that notify the custodian of who is to inherit the IRA.  However, these financial institutions have no legal obligation to find the beneficiaries, making it important for the IRA owner to find ways to inform heirs of the account.  If not, non-spousal IRA heirs may miss many required minimum distributions.

Vanguard holds unclaimed IRA assets in its Abandoned Property Unit until the IRA owner would have turned 70 1/2.   After that, Vanguard waits a certain interval and then turns the money over to the state, which technically distributes the money out of the account.  So do your heirs a favor and make those beneficiary designations available to them.

See Deborah L. Jacobs, What Happens When IRA Inheritors Miss a Key Deadline?, Forbes, Jan. 10, 2014.

http://lawprofessors.typepad.com/trusts_estates_prof/2014/01/ira-inheritance-issues.html

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