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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19257  
Subject: Re: I need help w/IRA rules Date: 3/30/2001 11:30 AM
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Greetings, jffer1217, and welcome. You asked:

Owner reaches 70.5 in 2001; his spouse is 64. The MDIB table is obviously more favorable because she is over 60. He dies sometime before spouse reaches 70.5. Is she allowed to continue payments based upon MDIB for the remainder of her life, or does the single life table kick in at 70.5?

At the owner's death, the beneficiary spouse may claim the IRA as her own through a rollover, and then take distributions using the MDIB table at her age 70 1/2. At her death, heirs could then use their life expectancies (after a split of their share into a separate IRA) to take MRD.

Alternatively, the spouse may keep the IRA in the decedent's name. In that case, her MRD will be based on her single life expectancy as recalculated annually beginning in the year after the year the participant died. At her death, her beneficiaries must take MRD over her remaining fixed-term life expectancy based on her age at her birthday in the year of death.

They have 5 children, all currently named equally as contingent beneficiaries. At her death it appears wise to split the remaining IRA assets into 5 equal accounts to take advantage of their ages. My question pertains to the disclaimer option. The IRA is fairly large. Could she disclaim part of the account value in favor of each child and keep sufficient assets for her use? She names the children as beneficiaries of her account which reverts to them at her death. Does the disclaimer have this flexibility, or is it only available for the entire account? Is the disclaimer a gift that uses up part of the unified credit?

Understand I am not a lawyer, nor am I providing any legal advice in any shape, manner or form. You should consult with your estate planning attorney regarding this situation. However, it's my understanding any heir may disclaim all or part of any bequest, to include an IRA. There are specific legal procedures for doing so, and those must be observed. The disclaimer in no way constitutes a gift because, by disclaiming the property, it's not the heir's to give. As I said before, though, consult your attorney for details and to ensure all legal requirements will be met in this regard.

Regards..Pixy
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