Is there a way to disclaim an inheritance but be able to decide who gets the inheritance that you disclaim?
FYI, we are talking about a non-spousal inherited traditional IRA account. The original traditional IRA was left to siblings in a share share alike fashion. One sibling would like to not take the inheritance but be able to direct who gets their share of the non-spousal inherited traditional IRA. Is this possible?
According to Investopedia disclaiming is easy but you will not have the right to signify who receives the inheritance. Instead, "the assets will pass to the contingent beneficiary as if the first beneficiary had died."
Note that disclaiming by the sibling could still result in the desired outcome - it all depends on how the will was written or, if no will, who is next in line in the eyes of the court. Strategic disclaimers are not uncommon.
No. As gef05 states, the assets go to the contingent beneficiaries. But, to clarify, 401(k) and IRA accounts pass according to beneficiary designations on the account, they are not part of the probate estate. (i.e. the Will is ignored so long as the form is on file) They only become probate estate assets if there is no beneficiary form on file with the account custodian.
In our case, we have the spouse as primary, and our daughter as secondary on the beneficiary form. This way, a disclaiming by the surviving spouse will send the account to the kid.
