Non-Spousal Inherited Roth IRA disclaim procedure

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Joined: Sat Jan 06, 2018 8:05 am

Non-Spousal Inherited Roth IRA disclaim procedure

Post by stllrng2012 » Sat Jan 06, 2018 8:37 am

I am trying to determine precise process to disclaim a non-spousal inherited ROTH IRA. Have done quite a bit of research and familiar with most of pitfalls & procedures. Even current topical issues such as the RESA of 2016 and proposed limitations for this.

All three generations of accts involved are at Vanguard, of course and have got primary VG form "INDEM" from them but want to make sure I do this correctly and have found that this process is not done very often, hence I am reaching out to the deep knowledge base in this forum. Have even got conflicting advice from VG. May be best to find estate attorney but even that is somewhat problematic as this is fairly obscure situation I am finding.

My primary question revolves around the process and IRS requirements. I was sole beneficiary of my mothers Roth, hence the non-spousal inherited Roth in subject line. She passed late last year so am in the 9 month "window" for disclaiming. As part of the account renaming, I correctly processed this ROTH in my name and was told at the time, that doing so would not preclude me from disclaiming later during the 9 month window as long as I did not take any distributions. The conflicting info I am now getting is that in doing this renaming, I can NOT disclaim as just the assets being renamed will precude this per IRS requirements. My heirs are all younger than I and there would be substantial lifetime benefit for them to take these funds via the lifetime option per IRS single life expectancy requirements.

As I said, have researched this in depth. Section 2518 of IRS on this matter includes statement to effect of "The disclaimant must have not accepted any interest in the benefits of the discaimed assets" and this appears to be crux of issue as by retitlement of acct, have violated this requirement.

Any insights would be greatly appreciated.

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