[WSBAPT] Qualified Disclaimer or TEDRA for QRP?

[John Creahan]

Hi David,
I have two thoughts.
First, if you go the disclaimer route, confirm that the disclaimed assets will go to the estate rather than to grandchildren or other beneficiaries. That information would potentially be on the beneficiary designation or the account’s default provisions.
Second, is there any way to keep the current IRA beneficiaries and adjust the distributions to them and others? Getting the IRA administrator to comply with a TEDRA or disclaimer could be time consuming and cost more than its worth.
Hope this helps,
John

John Creahan
www.cairn-law.com<http://www.cairn-law.com/>
Now located in the heart of Fremont
3417 Evanston Ave. N, Suite 312
Seattle, WA 98103
206-578-5877


From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of David Faber
Sent: Thursday, January 25, 2018 1:55 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Qualified Disclaimer or TEDRA for QRP?

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

*** NOTICE: ATTORNEY CLIENT COMMUNICATION - PRIVILEGED & CONFIDENTIAL.  This communication may contain privileged or other confidential information. If you are not the intended recipient, or believe that you have received this communication in error, please do not print, copy, retransmit, disseminate, or otherwise use the information. Also, please indicate to the sender that you have received this communication in error, and destroy the copy you received.***
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20180125/c98c124f/attachment.html>