[WSBAPT] Beneficiary Designations

Wed Apr 15 13:53:58 PDT 2015

Hi Katherine,
I’m confused about the beneficiary designations here. You said that Dad did not file the beneficiary designations you created. Did the unfiled designations name Mom then estate? Or did Dad already have beneficiary designations on file that named mom and then the estate as beneficiaries and the unfiled designations had a different distribution scheme?
If there are no beneficiary designations on file, if you haven’t already done so, you may want to check the governing instrument to see who takes in default (some institutions have children as default beneficiaries).
Assuming the estate is the default beneficiary, I don’t think the PR can disclaim on behalf of the estate to get distributions out to the kids. The good news is I don’t think she has to. The estate may be able to get a financial institution to divide Dad’s IRA into accounts for each beneficiary. Not all financial institutions are willing to do so, but Natalie Choate strongly believes that it is permissible, and that the PR can transfer the account to a more accommodating bank. Ms. Choate discusses this issue at http://www.ataxplan.com/bulletinboard/ira_providers.cfm. The children would still not be able to withdraw based on their life expectancies, however. (This topic has recently come up on this board so you may be able to find other comments.)
Also, I don’t know if it helps, but Mom may have had a community property interest in the account and, even if she didn’t, her estate may have some claims to the funds under Washington’s simultaneous death statute (RCW 11.05A). Her PR could potentially disclaim on her behalf, but you might end up with the assets still going to Dad’s estate. Also, this is obviously a sad situation, and you may not know why Dad committed suicide. But, if he was responsible for Mom’s death, you may need to think about how the slayer statute would impact the distributions.
John

John Creahan
john at cairn-law.com<mailto:john at cairn-law.com>
1325 4th Ave., Suite 940
Seattle, WA 98101
206-621-5848
www.cairn-law.com<http://www.cairn-law.com/>
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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Katharine P. Bauer
Sent: Wednesday, April 15, 2015 1:03 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] Beneficiary Designations

Thanks Liv, all things I briefly thought of.  I appreciate the comments!  I have just never had the PR disclaim any IRAs/retirement plans payable to the estate so wondered if anyone else had done that....all depends on the above and on the contract language, of course.
Thanks!  Hope all is well with you and yours.  Been a while since we talked!
Kathie

On Wed, Apr 15, 2015 at 11:52 AM, Liv Wernecke <lwernecke at bpmlaw.com<mailto:lwernecke at bpmlaw.com>> wrote:
Katherine, Here are some issues: Watch RMD, selling securities as an acceptance 25.2518-2(d)(1) etc.; community property issues; RR 2005-36, Regs 1.401(a)(9)-8; see GCM 39868 on income tax; also, the provider’s agreement or adoption agreement may have a troublesome clause or two. It may provide how the H’s 1/2 interest passes. Who does one send the disclaimer to; the provider and PR? Proof of timing of the deaths is obviously important. Any problems with  PR’s  power to disclaim? I have not thought through the son’s piece. Regards, Liv

Livingston (Liv) Wernecke
Shareholder
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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>] On Behalf Of Katharine P. Bauer
Sent: Wednesday, April 15, 2015 11:15 AM
To: WSBA Probate & Trust Listserv
Subject: [WSBAPT] Beneficiary Designations

Situation:
Mom died, Dad committed suicide an hour later.
Dad has huge IRA for which he did not follow through on filing with them the beneficiary designations we created.  Primary was mom, secondary is Estate.  This is a taxable estate and we will lose a large percentage of the IRA to taxes.

Estate legatees/beneficiaries are an adult daughter and trust for disabled adult son.

Question:   Has anyone ever had a PR "disclaim" a payment from an IRA to the estate?  (Daughter is PR) The "fallback" beneficiaries in the contract are the children.  My thought is to force payment outright to kids, allow them to take over their lifetime,  Son could place his share into a self-settled trust or ???  Largest IRA - $1 million - holder is not allowing PR to direct to daughter/SNtrust under terms of Will.  I can go for a court order.

Just curious about the disclaimer idea.  Not busy enough today to take the easy route.
--
Katharine P. Bauer
Bauer Pitman Lifetime Legal, PLLC
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Olympia, Washington 98501
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Katharine P. Bauer
Bauer Pitman Lifetime Legal, PLLC
1235 Fourth Ave. East, Suite 200
Olympia, Washington 98501
tel. 360.754.1976
fax. 360.943.4427

e-mail: kpb at bpblegal.com<mailto:kpb at bpblegal.com>

This message is confidential and may be protected by the attorney-client privilege; it is intended solely for the use of the individual named above. If you are not the intended recipient, you are hereby advised that any dissemination, distribution, or copying of this communication is strictly prohibited. If you have received this e-mail in error, please immediately notify the sender by telephone or e-mail, delete this message from your files, and return any printed copies to the sender by U.S. mail. Circular 230 Disclosure: Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction, arrangement, or other matter
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