Wednesday, October 4, 2017
When the owner of an IRA passes away, many complicated legal issues can become problematic for the beneficiary. In many instances, advisors and planners handle these issues inappropriately. The myriad of possible legal missteps can potentially lead to costly consequences. Problems may be especially potent when the decedent’s spouse is the sole beneficiary of the IRA. In this case, the spouse may be in shock, or may be having an extremely difficult time processing the loss of the beloved and may be at a loss as to what steps they need to take next.
For an advisor, the solution in this scenario is to remain diligent. Upon the death of a client, it is most prudent to find out if the individual owned IRAs in order to assure adherence to the post-death distribution requirements. Overall, it is important to make sure someone is overseeing the process in order to ensure that all decisions are thoughtfully made and carried out.
See Seymour Goldberg, Practical Issues When an IRA Owner Dies, Ed Slott’s IRA Advisor, October 2017.