How Do I Title My Inherited IRA?

Thursday, December 04, 2014

By Joe Cicchinelli and Beverly DeVeny
Follow Me on Twitter: @theslottreport

This week’s Slott Report Mailbag sheds like on the titling of an inherited IRA and looks at the maneuvering of retirement assets through the disclaimer process. As always, we recommend you work with a competent, educated financial advisor to keep your retirement nest egg safe and secure. You can find one in your area here.

1.

My sister died 10/14 and left me her IRA. Realizing that the titling is important, I am getting conflicting methods from various supposedly knowledgeable sources. I believe this is extremely important!

Can you shed light?

Answer:
The titling of an inherited IRA can vary from one IRA custodian to another. The deceased IRA owner’s name must remain on the inherited IRA account title and the account title must indicate that it is an inherited IRA by using the word “beneficiary” or “beneficiary IRA” or “inherited IRA.”

There is no set format as long as the deceased IRA owner’s name remains on the account and it is clear that this is an inherited IRA. Some examples of properly titled inherited IRAs are “John Smith IRA (deceased 11/27/09) F/B/O John Smith, Jr., Beneficiary” or “Brian Willow as beneficiary of Joan Maple.”

2.

I am the executor of my father’s estate. My father, who was 75, left me, as his oldest daughter, 100% primary beneficiary of his IRA. My younger sister is listed as the 100% contingent beneficiary. He had a spouse who is not our mother. He wrote an unofficial will and discussed with me that he wanted to leave 40% of his cash assets to his spouse, 30% to me and 30% to my sister. Can I disclaim part of the IRA monies, transfer my share to an inherited IRA account, and designate the other percentages to the contingent and spouse beneficiaries? He had already taken his RMD before his death one month ago. Thank you

Answer:
You can choose to do a partial disclaimer of whatever amount of the IRA you choose. However, you cannot then designate the percentages that go to your younger sister. The full amount of the disclaimed assets will go to your sister.

 

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