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We had a few of these many years ago. Not sure if there's been some uniform probate adoption by the states to change this, but this was my experience.

First thing is to check with the IRA custodian. Their rules on intestate IRAs are the real driver. The custodian's procedures will depend partly on state probate laws and part on the company's policy...and I was surprised at how much of the process is simply the rules of the custodian.

If there was a beneficiary who predeceased the owner and no contingents, the custodian may simply allow the linear descendants of the owner be named equally....normally the adult children. If so, and they can be identified and named prior to Sept 30 of the year of death, then it should be treated as though they were the named beneficiaries all along and separate inherited accounts set up by 12/31 and directly transferred where they want it.If so, they would be responsible for any prorated undistributed RMDs, as I recall. And they can elect their distribution rate (life expectancy or 5 year rule). But if the will calls out something else...such as "my grandchildren equally", this may create an issue with the custodian.

The real challenge is if the custodian requires the estate be the beneficiary of the intestate IRA. If the owner died prior to the Required Beginning Date, then the IRA balance must come out not later than the end of the 5th year following the year of death. I've heard of custodians, many years ago, that required the estate be named beneficiary and dumped out the entire IRA into the estate...taxed at trust rates, in one year!! If death was on or after the RBD, the distributions must come out at least at the rate of the life expectancy of the decedent (had he survived). My experience has been that this is an expensive process and as you point out, time consuming in getting the court to appoint the beneficiaries.

And I've never heard of a custodian who couldn't produce last years IRA end-of-year statement. I mean, that's what they do...unless, I suppose, this is some fly-by-night outfit. At just about any custodian I've ever dealt with, all you have to do is produce the death certificate and letters testamentary naming you the the Estate Rep (Executor) and they should promptly provide you what you ask for.

Depending on the state, probate can be a real pain.

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