Inherited IRA
Lady with 2 regular IRA accounts dies. Iras are with 2 different institutions. (A bank and a brokerage firm) Has 1 child who is listed as beneficary on both accounts. Can he combine these 2 IRAS into 1 inherited Ira account or does he have to open 2 seperate accounts?
Permalink Submitted by Thomas Lane on Fri, 2007-11-02 21:42
To be certain, you would have to check the IRA Custodial Agreement with each instituation, however, I recommend that the beneficiary establish a properly titled beneficiary account with both the bank and the brokerage firm. Once the accounts are titled properly, the beneficiary should be able to transfer the funds from one inherited IRA account to his/her account of choice, including opening an account at a third institution and transferring both Inherited IRAs into the new account. I can’t imagine a custodian mandating that an Inherited IRA must remain with the original custodian, but the custodial agreement should answer your question.
Tom Lane
Permalink Submitted by Alan Spross on Fri, 2007-11-02 23:47
They can be combined, but be sure the same RMD divisor applies to both accounts before combining them. There are a few cases where an election is not made in time for both IRAs that could subject one of them to the 5 year rule. If there is anything different about the RMDs, do not combine them.
If kept separate, the RMDs can be aggregated if inherited directly from the same decedent.
Also, remember that the decedent’s returns and/or IRA file should be checked to see if there is any non deductible basis passing to the beneficiary.