A:

F

rom your question, it appears that the widow is the sole primary beneficiary, in which case any portion properly disclaimed by the widow to be passed to the contingent beneficiaries. If this is the case, the beneficiary to which you refer would be entitled to his share, unless he chooses to properly disclaim the amount. At this stage, it may be too late to take any action to prevent the beneficiary from squandering this sum. Had the issue been brought to light before the IRA owner died, the beneficiary designation could have included provisions to exclude that beneficiary, or for his share to be transferred to a spendthrift trust, if such a trust is available under the laws of the state in which you live. As you may know, a spendthrift trust is usually created to hold assets that would generally go directly to the (spendthrift) beneficiary, and is controlled by the trustee.

For further reading, see Disclaiming Inherited Plan Assets and Refusing An Inheritance.

This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS
  1. What does U.S. law say about contingent beneficiaries?

    Learn about regulations the United States has on the naming of contingent beneficiaries, the types of contingencies that ... Read Answer >>
  2. Can an IRA beneficiary roll the IRA over into another account and designate another ...

    It depends on the provision of the IRA plan document. Some (though very few) do not allow the designation of successor beneficiaries. ... Read Answer >>
  3. What are the pros/cons of naming a trust as the beneficiary of a retirement account?

    This has been the topic of an ongoing debate in the financial community between estate planning attorneys and financial advisors. ... Read Answer >>
  4. Under what circumstances will a contingent beneficiary receive an insurance payout?

    Learn the different types of contingent beneficiaries and what conditions must be met for these beneficiaries to receive ... Read Answer >>
Related Articles
  1. Managing Wealth

    Refusing An Inheritance

    Contrary to popular belief, inheriting assets isn't always a good thing. Find out what to do if you want to disclaim them.
  2. Retirement

    Breaking Down IRA Beneficiaries: Part 1

    It's important to give serious consideration to your IRA beneficiary designations.
  3. Financial Advisor

    How to Handle Client Beneficiary Designations

    Beneficiary designations are a critical financial planning step that can be easily overlooked. Here's how to ensure they are properly done.
  4. Retirement

    Mistakes in Designating a Retirement Beneficiary

    Make sure your beneficiary designations not only reflect your intentions but also meet the requirements to be effective.
  5. Retirement

    Designating A Trust As Retirement Beneficiary

    Designating a trust as your IRA beneficiary can be beneficial, but it requires proper planning to avoid problems.
  6. Retirement

    An Estate Planning Must: Update Your Beneficiaries

    Life changes make it time to rewrite your plan's designations.
  7. Retirement

    What You Should Know About IRA Beneficiaries: Part 2

    Here's how IRAs, and the beneficiaries you name, work with wills and trusts.
  8. Retirement

    Why You Need to Update Retirement Account Beneficiaries

    The designation of beneficiaries in retirement accounts takes precedence over a will. Don't forget to keep them updated.
  9. Investing

    What's a Contingent Beneficiary?

    A contingent beneficiary is a person who will receive a payout from a will, trust, life insurance policy or other annuity, based on a specific condition. For an insurance policy, the contingency ...
RELATED TERMS
  1. Secondary Beneficiary

    A person or entity that inherits assets under a will, trust or ...
  2. Named Beneficiary

    This term refers to any beneficiary named in a will, a trust, ...
  3. Contingent Beneficiary

    1. A beneficiary specified by an insurance contract holder who ...
  4. Absolute Beneficiary

    A designation of a beneficiary that can not be changed without ...
  5. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
  6. Beneficiary Clause

    A beneficiary clause is a provision in a life insurance policy ...
Hot Definitions
  1. North American Free Trade Agreement - NAFTA

    A regulation implemented on Jan. 1, 1994, that eventually eliminated tariffs to encourage economic activity between the United ...
  2. Agency Theory

    A supposition that explains the relationship between principals and agents in business. Agency theory is concerned with resolving ...
  3. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with a maturity of less than one year. T-bills are sold in denominations ...
  4. Index

    A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is a hypothetical ...
  5. Return on Market Value of Equity - ROME

    Return on market value of equity (ROME) is a comparative measure typically used by analysts to identify companies that generate ...
  6. Majority Shareholder

    A person or entity that owns more than 50% of a company's outstanding shares. The majority shareholder is often the founder ...
Trading Center