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Christopher B, Esq
Christopher B, Esq, Attorney
Category: Estate Law
Satisfied Customers: 2677
Experience:  Litigation Attorney with education focus on estate planning and tax
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Our IRA agreement indicates the funds "may" be distributed

Customer Question

Our IRA agreement indicates the funds "may" be distributed to an individual's estate if no beneficiary is named. This is more along the federal level where there's no guidance in the Federal Law. Our institution is in Maryland. Does MD law designate guidance? If so, could you provide the law when I can find the information?
Submitted: 1 year ago.
Category: Estate Law
Expert:  Christopher B, Esq replied 1 year ago.
My name is***** and I will be helping you with your question today. This is for informational purposes only and does not establish an attorney client relationship. Many accounts have a built-in default to the surviving spouse or children of the owner, that should be the first thing that you should check. If there is no default then your IRA, which is left without a designated beneficiary, then it’s paid to your estate. When this happens, IRS rules dictate that the account has to be fully distributed within five years. So, even though your heirs ultimately share in your IRA funds, it’s likely that a good portion of those funds will be eaten up by income taxes. Plus, being distributed within five years significantly limits the life expectancy of your IRA, cutting short its growth – and its benefit. There are no Maryland laws that specifically address this issue and the IRA will simply pass to the estate. Please let me know if you have any further questions or require any additional guidance. Please do not forget to positively rate my answer (There should be smiley faces or a 1-5 ranking on my answer. I would appreciate a good or excellent rating) as this is the only way that I am compensated for my work.
Expert:  Christopher B, Esq replied 1 year ago.
Just checking back in with your question, please let me know if I can do anything further. Please positively rate (There should be smiley faces or a 1-5 ranking on my answer. I would appreciate a good or excellent rating) my answer if you are satisfied as it is the only way I am compensated for my work.

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