Deceased, non spouse IRA for beneficiaries and distributions
If the mother is decd, and the 3 children are beneficiaries and each of the children take an unequal distribution from the the mother’s ira acct titled mother, deceased, subsequent to her death, payable to each of them, are they then prohibited from putting their 1/3 share into a conduit account called child, beneficiary of ira of mother, deceased, account? and if each of the checks taken out is for a different amount, how do they equalize?
thank you.
ellyn
Permalink Submitted by Robert Wright on Thu, 2007-11-01 16:21
Your answer is on page 92 of Natalie Choate’s 6th edidition – referencing the “Chloe Example”.
The 3 children can still create their own separate account.
Each child’s distribution must be treated as a reduciton in that child’s interest in the mother’s IRA.
Permalink Submitted by Alan Brooks on Thu, 2007-11-01 16:52
of a conduit? and thank you.
ellyn
Permalink Submitted by Al Fry on Thu, 2007-11-01 18:00
These would not be conduits, just inherited IRAs. Titled: “Sally Hubbard as Bene of Mother Hubbard”.
Permalink Submitted by Alan Brooks on Thu, 2007-11-01 20:12
subsequent to death….
ellyn
Permalink Submitted by Al Fry on Thu, 2007-11-01 20:25
Yes, only the IRA participant can own the IRA while living.
Permalink Submitted by Alan Brooks on Thu, 2007-11-01 20:33
is there a time limit from when someone dies to when an inherited ira is set up?
Permalink Submitted by Robert Wright on Thu, 2007-11-01 20:48
The separate accounts for the beneficiaries need to be setup by 12-31 of the year following the year of death if you want to be able to take advantage of the separate account rule (i.e. each beneficiary gets to calculate their own RMD based on their own life expectancy).
If separate accounts are set up after 12-31 of the year after the year of death, all three beneficairies will have to use the life expectancy of the oldest beneficiary.