Q: Who gets IRA payout when someone dies without beneficiary in IRA but with a will and living trust? Can it go to trust?

A: I’m so sorry to hear of your loss; I hope you’re hanging in there.

When someone has a trust, the purpose is to avoid probate. The way you avoid probate when you have a trust is to fund the trust by making sure the trust is listed as beneficiary (or owner) of assets. There are potentially tax benefits to naming individuals, and especially spouses, as direct beneficiaries of retirement accounts, just for your information.

Since that didn’t happen here, a probate court will be necessary to use the pour over will to pour over the retirement accounts into the trust. This will require the named Executor to hire an attorney to administer the estate.

Eventually, after debts/costs, the retirement accounts will be paid to the trust and split among the trust beneficiaries, as determined by the language of the trust.

I hope this helps, and good luck!

Stephanie M. Sexauer

sms@sexauerlaw.com

312-300-4743

A: Typically the default beneficiary, when one isn't designated, is the estate of the decedent. This means that you will probably have to go through probate.

1) Confirm this with the financial institution what documents they will require to access the funds;

2) Contact your local court and / or local attorney to get appointed as executor, personal representative etc.

3) Talk to a tax attorney about strategies for taking the money out of the IRA once you are appointed. There are options and some are more advantageous.