Rules for Successor Beneficiary of 2nd Gen Inherited IRA Post SECURE Act (Multiple Inherited IRAs for one Successor Bene)
In 2020, a son inherits an Inherited IRA and Inherited Roth IRA from his mom who originally inherited them 10+ years ago from her sister. From what I’ve read these 2nd Generation Inherited IRAs are subject to the new 10 year distribution rule regardless if they are first/second/third generation. Furthermore, the son also inherited a 1st Generation IRA and Roth from his mom. Therefore, the underlying question is given that both the 1st and 2nd Gen Inherited IRAs are subject to the same 10 year rule can we consolidate the them into one Inherited IRA and one Inherited Roth IRA for the beneficiary. This would result in 2 accounts instead of 4 and simplify ongoing administration. Mom passed in May 2020 and Aunt passed 10 plus years ago. Thanks for any insight you have.
Side note: We have a custodian that has already allowed the commingling of these accounts (but they are passing on confirming IRS compliance). Trying to determine if we should reclaim the assets back to the contra firm and set up separate accounts instead.
Permalink Submitted by Alan - IRA critic on Fri, 2020-08-07 16:49
SInce both are subject to the 10 year rule (as long as the son is not an EDB), there are no annual RMDs. An acceptable titling format for both accounts is “son as beneficiary of Mom” even though son is the successor beneficiary on one of them. If the custodian were to require a different titling, then combination would not be possible. With an acceptable title AND 10 year rule applying for both, they can be combined.