beneficiary designation

[Guest JBeck]

If an IRA beneficiary designation provides that two children share the IRA 50 percent each, and one child predeceases the IRA holder, what happens? Let's say the beneficiary designation and the IRA agreement doesn't address the issue. Does the surviving child get 100 percent of the IRA or does the deceased child's share go to the child's estate?

[Guest ERISA_kid]

Unless state law provides otherwise, I would treat the 50% attributable to the predeceased beneficiary as assets of the deceased IRA owner's estate.

[BPickerCPA]

Usually, it belongs to the surviving beneficiary, unless there is a PER STIRPES clause on the beneficiary designation form. I truly doubt it would revert to the IRA holder's estate.

In truth, either the IRA account agreement or state law will address this issue.