bene never claimed assest of parent deceased
we have a beneficiary that never took ownership of her parents IRA accts ( both mother and father). parents were deceased back in 2004. does the beneficary have to take a lum sum or only till sometime in 2009 to deplete the assets ( 5 years from date of death)? please give me both scenario if deceased was and was not of the RMD age. Thanks
Permalink Submitted by Alan Spross on Fri, 2009-07-17 21:42
For parent passing prior to RBD: Either the 5 year rule applies ending 12/31/2010 because of the 2009 waiver, OR the beneficiary can save life expectancy distributions by taking out each year’s (2005 thru 2008) RMD and paying the 50% excess accumulation penalty for each year (PLR 2008 11028).
If parent passed post RBD: Life expectancy RMDs can be taken as above, with the payment of the 50% penalty for 2005-2008 RMD amounts.
The beneficiary also needs to determine if the surviving parent assumed the IRA of the first parent to pass, or kept it in beneficiary form. That would change the above reponses if it was still in beneficiary form when the second parent passed. In other words, was the beneficiary a designated beneficiary or each IRA or did they get the IRA through the estate or trust? The rules stated above only assume the beneficiary was the designated beneficiary on each parent’s IRA.