A daughter was named sole beneficiary on one of her father's IRA's and she wishes to divide the IRA equally among her 6 siblings and herself. She wants to do this without incurring a tax liability to herself in the process. Does anyone know how this can be accomplished? I am not very familiar with IRA situations such as this one and am not having any luck with my research.

Thanks so much!
Sandy

It's possible, but it will depend on the IRA document's default beneficiary provisions.

If she properly and timely disclaims 6/7 of the IRA, then she will be a designated beneficiary to only 1/7 of the IRA for purposes of post-death minimum required distributions. If the 6 siblings are the default beneficiaries under the IRA document, then all 7 will be beneficiaries to 1/7 of the IRA.

I think you might be overthinking this. She's one of the 7 siblings, so (if the siblings are the default beneficiary) she should disclaim all of it and get her 1/7 under the default. Otherwise she gets 1/7th plus 1/7th of 6/7ths.

Well, she did do all the leg work . . .

You're right--if the siblings can take as default beneficiaries under the document--and that's an important "if", of course--then she should disclaim all.

I don’t think you can disclaim benefits, and have the benefits go to you. I think Sieve was right the first time. She would disclaim 6/7, and then ‘step aside’ so the remaining 6 children would share the disclaimed amount.

If the agreement does not have a beneficiary provision that defaults to the children, the other option would be to work out some arrangement where she takes a distribution, gives them their share and they reimburse her for any taxes incurred as a result of the amount she gives to them.

I agree with Sieve Post #2 and Appleby. There are estate distribution cases that hold if you waive, you then don't share at all in the subsequent residual or intestate distribution.

Actually, instead of giving the siblings money and hoping they give part of it back... have a CPA figure out the tax burden on the distribution and then split the net. (Basically, figure the daughter's taxes w/ and w/out the distribution, subtract the difference from the distribution and then divy it up.)

Agreed....much better option

Ok, I stand corrected. Thanks.

And my correction stands corrected. (I always thought that estate planning stuff was complicated . . . !!)