Legal Question in Wills and Trusts in California

beneficiary of IRA
7 relatives are to be beneficiaries of an IRA. One is my 17 yr old daughter. This IRA was to have been put in a trust but it did not happen. Although loosely given written instructions for the executor are to divide amongst 7 people, the decendant has only 4 names listed on the IRA as beneficiaries. Only one of the 4 listed are really to inherit the money. The other 3 already rec;d the funds prior to the death. The executor wants to divide the $90k amongst the 4 names listed and for the 4 people to then distribute the money as intended among 7. Three of the listed are to receive none of the distribution having already rec'd it (one is my other daughter.) There are going to be big tax consequences. A trust does exist but those beneficiaries are not listed. The exucutor says this is the best way to avoid probate, additional fees, etc. We have reason to believe the executor is lying (it serves her interests to do it this way). (There should be no problem with the 3 people turning the money over.) The deceased had started taking withdrawls. She was about 73. The 4 listed beneficiaries with the tax consequences range in age from 17 to 23 with only the 17 yr old entitled to 10k of the 22.5k she will receive.

Asked on 1/11/08, 7:09 pm

2 Answers from Attorneys

Mitchell Roth MW Roth, Professional Law Corporation

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Re: beneficiary of IRA

In the situation you describe, the IRA must be paid by the IRA account holder to the four listed beneficiaries since that is what controls. The intentions of the decedent don't control. Once the income taxes are paid on the IRA, the balance should be distributed equally to the four. Those four are free to do whatever they want with the funds.

Answered on 1/12/08, 12:24 am

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