By Linda M. Toga, Esq.
The Facts: My mother died recently. She and my brother, who is my only sibling, had not spoken to each other in over a decade. In her Will, my mother disinherited my brother. On the beneficiary designation form for her IRA, my mother named my father, who predeceased my mother, as the sole beneficiary. She did not name any contingent beneficiaries.
The Question: Under the circumstances, is my brother entitled to a share of the IRA despite the provisions of the Will?
The Answer: How the funds in an IRA are distributed upon the death of the account holder is governed by the beneficiary designation form associated with the account. If there are no living beneficiaries named, the funds in the IRA effectively become an estate asset and they will be distributed in same manner as the rest of the decedent’s estate. If the decedent died with a Will, the terms of the Will will dictate how the funds are distributed. If the decedent died intestate (without a Will), the intestacy statute that dictates who inherits a decedent’s assets will control.
Since your father was the only beneficiary named on the beneficiary designation form, and he predeceased your mother, the funds in the IRA are now estate assets. If your mother had died without a Will, your brother would be entitled to one-half of your mother’s entire estate, including the funds that had been in the IRA. However, since your mother had a Will, the terms of the Will control. That means that your brother is not entitled to any of the estate assets.
Interestingly, if your mother had named you and your brother as contingent beneficiaries on her IRA, your brother would be entitled to a share of the funds in the IRA despite the fact that he was explicitly disinherited in your mother’s Will. This fact highlights the importance of considering all of your assets when engaging in estate planning, including but not limited to jointly held property and accounts, retirement plans and life insurance policies, so that your estate plan is comprehensive and consistent. Inconsistencies could result in a costly will contest.
Linda M. Toga, Esq. provides legal services in the areas of litigation, estate planning and real estate from her East Setauket office.