Disclaimer Of Retirement Benefits PLRS 201125009 (June 24, 2011)

by Bruce Givner on January 6, 2012

When a beneficiary files a “disclaimer,” it means that the beneficiary is treated as having died so that the beneficiary never received the bequest. A disclaimer must be filed within 9 months of the date of death and the disclaimant must not have accepted any interest in the property or any of its benefits. IRC §2518. In Rev. Rul. 2005-36, the IRS ruled that a beneficiary’s receipt of a required minimum distribution from an IRA constitutes acceptance of the RMD, but does not prevent the beneficiary from making a qualified disclaimer of the balance of the IRA.

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In PLR 201125009, the required minimum distributions were being automatically deposited into a joint bank account for husband and wife. First the husband died, and then the wife died less than 9 months later. Their daughter petitioned the court for authority to disclaim her mother’s interest in the balance of the retirement account, excluding the distributions already received. The court approved the petition and, under state law, the wife was treated as dying before her husband. The IRS approved the ruling request based on the 2005 Revenue Ruling.

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