Can an IRA with a beneficiary be changed to match a will if the beneficiary is in agreement?

H

HAS86

New Member
Jurisdiction
North Carolina
I am the executor for my grandfather's estate. He left a will with percentages for my uncle, myself, and my brother. However, the biggest account is his IRA, which he left to my uncle as a beneficiary. My uncle wants to split the IRA with myself and my brother (the other two people listed in the will) according to what the will states. Is there anyway to get a court order if there is an agreement on division of the IRA funds? We would just like to split it into 3 separate Inherited IRA accounts. The estate is being probated in North Carolina if that information is needed.
 
Why would you need a court order? Once the funds are in your uncle's possession he is free to do with them as he pleases, including sharing it with you and your brother.
 
I gave the following answer on another site:

The will is irrelevant with regards to the IRA.

The IRA beneficiary designation is what controls who inherits the IRA.

The IRA bypasses probate as it was no longer part of your grandfather's estate at the moment of his death. It automatically belonged to your uncle.

Your uncle is the beneficiary. He gets the IRA and he is subject to the IRA rules for inherited IRAs which he would be wise to read at:

https://www.irs.gov/pub/irs-pdf/p590b.pdf

Your uncle needs to be aware of and follow those rules lest he be hit with a whopping tax bill.

Of course, if he wants to take a large distribution, pay the tax on it, and give the money to you and your brother, he's welcome to do that. Though I doubt that he will be willing to do that once he learns that the money is all his and that giving any of it away will cost him plenty. But, hey, you know him better than I do.

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An attorney provided the following response to the question:

"Rather than getting a court order, your uncle likely can just submit a disclaimer to the institution holding the IRA. Assuming your grandfather was not married at the time of his death and that there were no other/alternate beneficiaries named on the IRA then the effect of the disclaimer would be that the IRA becomes an asset of your grandfather's estate and thus divided as his will specifies."

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Note from me:

The latter suggestion means that the IRA would have to be probated along with the rest of grandfather's estate.
 
Thank you both for your responses. The hope was that we would each take the tax hit on our own portion and not my uncle every time he withdraws money. I haven't been able to find a way to get around him taking all of the tax hit.
 
HAS86 said:
Thank you both for your responses. The hope was that we would each take the tax hit on our own portion and not my uncle every time he withdraws money. I haven't been able to find a way to get around him taking all of the tax hit.
Click to expand...


Why not reimburse your uncle for your share of what you believe to be a "hit"?
 

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