If my father had IRA accounts set up that passed to my stepmother on his death, can I be excluded from collecting now that she has died?

He had set up a beneficiary statement that was “all lawful living children” would inherit after my stepmother. This would have only meant me. When he passed the IRA accounts were rolled over into accounts for her, but no new beneficiary statements were signed by her. The financial management company is stating that now the accounts can only be disbursed to my step-mother’s children, now that she has passed, since the “all living lawful children” is still in effect, even though this was not set up by her. This seems to negate the original intent. Do I have any options? My stepsiblings do not want me excluded.

Asked on July 18, 2014 under Estate Planning, Arizona

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

I am so sorry for your loss.  It sounds as if you and your step siblings have a very good relationship and that it may not be necessary for you to hire an attorney to contest the distribution only to them.  But here is what I think happened. When the assets passed to your step mother at the time of death they became hers alone and if there is not a designation in place they would be distributed to the "estate" and then as per her wishes in a Will or through intestacy. As for the "all living children" statement, it is unclear to me what exactly that is and quite frankly, I think it has no bearing on the distribution other than possible showing his original intent as you say.  It sounds as if he tried to control the distribution "from the grave" as they say but once the funds went to your step mother in the form that they did, he could not.  If he had set up a trust and then named you as the alternate beneficiary once she died perhaps then that statement would have meaning.  But in the scenario you have described I think it means nothing legally. Your step siblings can choose to ignore a Will or intestacy and have you inherit.  You should speak with a lawyer about that option. Good luck.


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