Estate Inherited IRA and Individual Inherited IRA
My 85 year old mother in law passed away this year and had 3 IRA’s. For 2 of the IRA’s there were named beneficiaries, the third there was no named beneficiary. This account is with a broker that is saying the monies must be deposited into an estate inherited IRA and since there were no named beneficiaries, keep it in this account and take RMD’s based on my mother in laws life table or distribute the entire amount out. In distributing it out it would have a 1099R issued to the estate and result in significant taxes.
For the other two accounts that had named beneficiaries, the beneficiaries set up inherited IRA’s. My mother in law did not take any RMD before she died so the beneficiaries will have to take the RMD for this year.
My question is, if we can’t get around the account that the broker says has to go into an estate inherited IRA, can we take all of the required 2018 RMD based on the value of the three accounts at 12/31/17 from the estate inherited IRA and not take any from the beneficiary inherited IRA accounts?
Permalink Submitted by Alan - IRA critic on Fri, 2018-07-13 19:10
Yes. The year of death RMD is a joint responsibility of all beneficiaries of all IRA accounts. Therefore, the year of death RMD can be satisfied by a single distribution to the estate’s inherited IRA. The executor could assign the estate’s inherited IRA balance to the estate beneficiaries who would then have to continue RMDs based on your mother’s non recalculated life expectancy, so the stretch for the estate’s share will be limited. The beneficiaries who were named on the other two accounts should establish separate inherited IRA accounts as well in order to be able to use their own ages for beneficiary RMDs.