IRA Rollover from child to parents and child dies
A child (non minor) dies and leaves her ira to her parents. The IRA is then split in two for each of the parents who were the beneficiaries. The mother then dies a few years later. Can the father/husband roll over the ira into his other portion or is he stuck to payout over 5 years, lump sum or stretch? What are his options?
Permalink Submitted by Alan Spross on Wed, 2007-10-31 01:10
Since the original IRA was the child’s, the parents are non spouse beneficiaries. They must maintain the separated accounts as inherited and can never assume them as their own.
Assuming mother had named father as successor beneficiary on her inherited IRA, father can continue RMDs based on the remaining life expectancy of the first successor beneficiary, ie mother.
Let’s assume mother inherited from the child at age 49, and began taking RMDs based on her life expectancy in the following year at 50. Her divisor would have been 34.2, and would be reduced by 1.0 each year. When mother passes and father inherits, he must retain mother’s schedule from whatever year it was. He never uses his own life expectancy.
HOWEVER, if mother was under the 5 year rule herself, father will also be under the same 5 year rule as mother. Therefore, it must be determined how mother was taking RMDs.