IRA Beneficiary dies before MRD taken
IRA participant dies in 2006 with two sons (her only children) as 50/50 primary beneficiaries, no contingents are named.
Son #2 has established Inherited IRA & his 50% is funded and he will take MRD in 2007, the year after his mother’s death.
The other son, Son #1 has died before his own Inherited IRA account was established, and before any MRDs were taken; son #1 has no children, no wife, no will. It appears this IRA will ultimately go to son #1, and presumably an MRD must be made.
Who must take the MRD in 2007? Son #1’s estate?
Permalink Submitted by Alan Spross on Fri, 2007-08-31 19:38
First, the death of Son #1 will not change the RMD of Son #2 who has created his separate account prior to the deadline. I think you meant that the Son #1’s share might eventually go to Son #2 as well per state intestate provisions.
The share of Son #1 goes where the IRA agreement so indicates, but his estate would be typical under most agreements and apparently applies here. He is still treated as the designated beneficiary for RMD purposes, but the RMD schedule for the estate may depend on whether the IRA owner passed before the RBD or not because no election that the IRA agreement may require out of the 5 year rule was apparently made. In other words the estate may be able to use the remaining life expectancy of Son #1, or the lack of an election may result in required use of the 5 year rule. Since state intestate provisions will apply to the estate, the administrator may have some tough decisions to make with respect to distributions from the IRA because they will not initially know who potential beneficiaries are and when the estate may be closed. Perhaps Son #2 should apply to the court to be named administrator of the estate.