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RayAnswers, Attorney
Category: Estate Law
Satisfied Customers: 36355
Experience:  Texas lawyer for 30 years in Estate law
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My cousin got passed away in last year, she had both

Customer Question

My cousin got passed away in last year, she had both personal rollover IRA and Roth IRA. She put her parents as the first beneficiaries and her younger sister as the second beneficiary. My cousin's parents want to disclaim both inherited IRA accounts. From the Fidelity required" Acknowledgement and Indemnification" documents which said that disclaimant should make sure the disclaimer is valid under the applicable state law. Since my cousin used to live in North Carolina when she transferred her 401k to her personal roller over IRA after she left the company and she lived in Connecticut when she passed away, her parents and her younger sister who are the beneficiaries live in California, so I am wondering which state law should be applicable as regard to whether the disclaimer is valid or not? Assuming the Connecticut State law apply for the disclaimer, I am wondering if any special rule on disclaimer in Connecticut or some requirements such as the disclaimer must be written, signed and notarized in 9 months after the IRA accounts owner's death. If the disclaimer eventually is not a valid one, what is going to happen, do they need to redo it or they will get some penalties? Is it possible the State will take away the money if the disclaimer is not a valid one? Can I find those regulations online, thanks.
Submitted: 3 months ago.
Category: Estate Law
Expert:  RayAnswers replied 3 months ago.

Hi and welcome to JA. Ray here to help you today.

Can you tell me exactly why they want to disclaim it, are they wanting it to go to the younger sister?

Customer: replied 3 months ago.
they want it to go to the younger sister.Thank you.
Expert:  RayAnswers replied 3 months ago.

So here you would have to ask Fidelity what law applies.This isn't say a legal statute question but rather terms of the account.If they cannot disclaim it here, they can always claim it and then gift it to the sister.

The lifetime gift limits are $5,450,000 so they could easily cash it and then gift it to the sister. It appears to me that California law applies here, but the Fidelity people have final say in this matter.

Expert:  RayAnswers replied 3 months ago.

Whoever inherits this may owe taxes or they can defer the taxes and roll it over and draw it out as through it were their IRA.If the parents were to disclaim, and the sister for some reason was held to not be the legal heir then it passes through his estate, probate would have to be opened and it goes under will or if no will to the nearest legal heirs.Hence I guess I wonder if the parents here wouldn't be better to claim it and then regift it to the younger sister.

I appreciate the chance to help you tonight.I wish you the best here and a happy 4th of July.

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