Our customer John had an IRA with his wife Sally named as beneficiary. No contingent beneficiary was named. Both are deceased. The successor trustee, their CPA, just learned of the account and has requested that funds be distributed. Our legal department is advising that the check be issued to the estate of Sally; however, the CPA has advised that her estate was small enough to fall under CA's small estate provisions, so no formal estate was established.

How should we handle this situation. Our operations area is concerned about the reporting. There is no EIN for Sally's estate for reasons mentioned above.

Listen to your legal department. Don't take advise from a customer. Not saying what your legal department is saying is accurate.

No EIN for distribution. We decided to have CPA complete the small estate affidavit and direct us to issue a check to the trust. Not talking big dollars here. And account owner has no children or next of kin, so unlikely that anyone will come back to us later saying we disbursed funds in appropriately. Risk-based decision.

What a mess.........

Not really an IRA issue.

Assuming the beneficiary predeceased the participant (not clear here) the money belongs to the participant's estate. Add the amount of funds in the IRA to determine if they can still waive estate administration under state law. If not, then they need to open an estate account. Establish what authority the CPA has to sign anything.

Not sure where the mention of a trust came from.