It’s in the IRS Regs 1.401a(9)5 – Q&A 4 copied below:

Q–4. For required minimum distributions during an employee’s lifetime, what is the applicable distribution period?

A–4. (a) General rule. Except as provided in paragraph (b) of this A–4, the applicable distribution period for required minimum distributions for distribution calendar years up to and including the distribution calendar year that includes the employee’s date of death is determined using the Uniform Lifetime Table in A–2 of §1.401(a)(9)-9 for the employee’s age as of the employee’s birthday in the relevant distribution calendar year. If an employee dies on or after the required beginning date, the distribution period applicable for calculating the amount that must be distributed during the distribution calendar year that includes the employee’s death is determined as if the employee had lived throughout that year. Thus, a minimum required distribution, determined as if the employee had lived throughout that year, is required for the year of the employee’s death and that amount must be distributed to a beneficiary to the extent it has not already been distributed to the employee.

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The IRA agreement will dove tail with the above as to the beneficiary receiving the distribution. If the estate got it, it would be diverted to possibly different people than the named beneficiary on the IRA. Therefore the beneficiary must take the RMD balance and it will be taxed to the beneficiary. Of course, the IRS must be re titled prior to that distribution showing the beneficiary’s SSN on the account. If the RMD does not get taken in time, it needs to be taken ASAP after discovery, and if that is in the following year, a 5329 should go on the decedent’s final return requesting the penalty be excused due to reasonable cause.

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