Legal Question in Wills and Trusts in South Carolina
Is IRA Stock acct attachable to Estate debts?
My father passed away in January 1999. My Uncle is the executor of his will. My father had an IRA stock account at the time of his death. My brother, who passed away 2 years prior to my father, was the sole beneficiary on the account. My sister and I are the heirs to my father's estate.
The stock account manager said the beneficiary was not changed on the account. Is the IRA stock account attachable to the estate debts? How can we find out if my father put in a change of beneficiary request?
2 Answers from Attorneys
Re: Is IRA Stock acct attachable to Estate debts?
The answer really depends on State Law, however under normal provisions if the beneficiary of an IRA dies before the participant and no alternate is named, the IRA passes to the decedents estate and would then be subject to claims of creditors, provided the claim is made within the statutory period of time.
Re: Is IRA Stock acct attachable to Estate debts?
The money normally wouldn't go to any deceased person's estate! If your brother has children and the IRA beneficiary form listed THEM as alternates, they'd get it, but that's unusual, too. Normally the money will end up in your father's estate and then go to you remaining children; you ought to be aware of the possibility of having it paid out to each of you over long periods of time, delaying the imposition of an income tax of some sort and allowing further growth in pre-tax dollars. I'm not fully up on this, but if I'm right, it's the only sensible way to inherit IRA funds and it is tax-wise very foolish to take it all out at once.
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