Year of Death RMD – Multiple Beneficiaries
Client did not take RMD before dieing. She had 4 IRAs and 2 beneficiaries.
Two of the IRAs they set up as 5 year payouts.
One IRA they set up as an inherited and have taken nothing.
The 4th IRA was set up as a 5 year payout by one beneficiary but taken in a lump sum by the other.
The lump sum taken by the one beneficiary, satisfies the entire RMD of the decedent for the year.
Are we done or does each beneficiary have to take out half of the decedents RMD so that the one who did not take the lump sum still has to take out his half?
Confused enough?
Permalink Submitted by Alan Spross on Thu, 2010-12-16 00:05
Client evidently passed after their required beginning date. The RMD shortfall for the year of death can be satisfied by any of the beneficiaries in any combination. Therefore, the one that took the lump sum distribution has satisfied the RMD for the year of death and the others need not distribute any more.
SInce the 5 year rule does not apply if the decedent passed after the required beginning date, then the 5 year payouts are just optional amounts the beneficiaries appear to want from some of the IRAs. That’s OK, they can take out more than their RMD, but not less.
But they never created separate accounts for each beneficiary? Are both beneficiaries named as 50% on EACH account, or do they vary by account? This will affect their options in future years.
Permalink Submitted by Mobey on Thu, 2010-12-16 00:25
Thanks Al, they were 50% beneficiaries on each account and the accounts were split.
[quote=”[email protected]“]Client evidently passed after their required beginning date. The RMD shortfall for the year of death can be satisfied by any of the beneficiaries in any combination. Therefore, the one that took the lump sum distribution has satisfied the RMD for the year of death and the others need not distribute any more.
SInce the 5 year rule does not apply if the decedent passed after the required beginning date, then the 5 year payouts are just optional amounts the beneficiaries appear to want from some of the IRAs. That’s OK, they can take out more than their RMD, but not less.
But they never created separate accounts for each beneficiary? Are both beneficiaries named as 50% on EACH account, or do they vary by account? This will affect their options in future years.[/quote]