[WSBAPT] Qualified Disclaimer or TEDRA for QRP?

[David Faber]

I am working with the PR on an estate in which Decedent had named two of
his four children as beneficiaries on two separate QRP accounts (one a 401k
and the other an IRA). Both of the children agree that Decedent did not
actually intend that they should be the only beneficiaries, having been
told by Decedent that he wanted them to divide the money between the
siblings. The children, and the heirs of Decedent's estate at large, have
been made aware of the income tax implications of having the QRPs pass to
the estate and out to the heirs, (which really should not be all that much
because I believe the total amount of assets is roughly $50k and there are
seven total beneficiaries) and everyone appears to be on board with this
plan.

My problem is determining what is the correct course of action: a Qualified
Disclaimer or a TEDRA Agreement (or both)? The former is a bit simpler to
execute, and I was thinking of writing it up in such a way that the
disclaiming child expressly disclaims their interest in the QRPs but not in
the proceeds of the QRPs that come through the estate, but I have never
drawn up a Disclaimer that used that type of limiting language and wanted
to gauge the temperature on this list.

The alternative, of course, is a TEDRA Agreement, with either just the two
beneficiary children and PR varying the terms of Decedent's beneficiary
designation, or all of the heirs signing because of the effect of the
Disclaimer on the income tax obligations of each heir.

Anyone have thoughts on the best practice here? I'm trying to make this as
simple as possible for my client and the estate because it isn't an exactly
wealthy family, but I do, of course, want to make sure that I'm crossing my
"t"s and dotting my "i"s.

Thank you.

Best,
David J. Faber
Faber Feinson PLLC
210 Polk Street, Suite 1
Port Townsend, WA 98368
(360) 379-4110

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