Facts:
IRA account owner dies with an account balance and has named 3 beneficiaries.

Do to the nature of the assets in the account all three file a disclaimer however it is more than 9 months after the date of death and does not qualify under IRC 2518. All are over age 21 etc.

The terms of the plan document do not address non-qualified disclaimers.

If qualified, the Estate of the deceased would be the default beneficiary.

1. Does the trustee/custodian honor the disclaimer & pay to the estate.?

2. if so, does this create a reportable (deemed) distribution to the donor ( disclaiming) beneficiaries and is a 1099R issued to them?

3. If and when a distribution to the estate occurs, what are the reporting requiremeents.

4. If a deemed distribution has occurred, does this create basis and how would it be reported by the estate?

After 30 years plus in this business this is the first ine of these I've seen.

Does anyone out there honor non-qualified disclaimers?

Does the trustee/custodian just say NO?

We can't force a distribution of an IRA.

The trustee cannot honor the disclaimer, because it does not meet the requirements of IRC 2518. The beneficiaries will have to remain beneficiaries, and will receive 1099-Rs for any distribution they request from the IRA.

The children can distribute the assets and settle up with the beneficiaries of the estate, taking into consideration any income taxes they would owe on- or as a result of – the distributions.


No ‘deemed distribution’ would occur, as the distributions are usually made only at the request of the beneficiaries ( except in the case of an orphan IRA).

If the disclaimer had been done timely and met other requirements, and the estate became the beneficiary as a result of---then any 1099-R would be issued in the TIN of the estate- IRA FBO estate of John Brown.

Apparently this discussion has come up before.

see: HERE