Disclaimers and RMD distributions

[Guest Denise Murphy]

Husband was over 70 1/2, wife is primary bene with children as contingent; method was jt life, both recalcuated. Husband dies and wife disclaims the IRA. Does this mean a lump sum to the children since both lives were being reclaculated or does the surviving spouse sill have a life expectancy and the children can use the mothers single life factor for the continued payout?

[BPickerCPA]

Distributions continue on single recalculated life of spouse. Disclaimer is ignored. When she dies, all money must come out before 12/31 of year after death.

[Guest Martin Silfen]

Does BPicker have any authority for that last answer? Perhaps an IRS private letter ruling? I could see it going either way: either (i) the disclaimer causes the wife to be treated as if she were deceased for minimum required distribution purposes as well as estate tax purposes; or (ii) the disclaimer does not affect minimum required distributions, and distributions to the children continue for the remaining lifetime of the wife. The former approach seems more correct, since the IRS has ruled that the disclaimer is effective to shift income taxation to the children.

[Guest P A Weick]

Picker's answer is consistent with PLR 9450040.

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