Death of second tier IRA beneficiary
Original IRA account owner Adam, DOB 7.4.1920, DOD 1.16.2001. Had named son Cain as his beneficiary.
Cain DOB 3.25.1943 dies 5.25.2002. Named friend Elijah as his beneficiary. Elijah names wife Sara as his beneficiary. Elijah dies in 2010.
Cain’s distributions are based on original owner Adam’s DOB, and Cain’s DOB.
(1) Are Elijah’s distributions in years prior to his own death still based on original owner Adam’s DOB and original beneficiary Cain’s DOB OR on original owner’s DOB and Elijah’s DOB?
(2) Now that Elijah is deceased, whose DOB’s are used?
(3) Can wife Sara take on as her own IRA or is she always the beneficiary because she wasn’t Adam’s wife?
Thanks much!
Permalink Submitted by Alan Spross on Thu, 2010-05-13 19:56
(1) Are Elijah’s distributions in years prior to his own death still based on original owner Adam’s DOB and original beneficiary Cain’s DOB OR on original owner’s DOB and Elijah’s DOB?
Yes, they are based on Cain’s non recalculated (ie 1.0 divisor reduction each year) life expectancy based on Cain’s age in 2002.
(2) Now that Elijah is deceased, whose DOB’s are used?
Same as above. There are no new life expectancy stretches after Cain’s no matter how many successor beneficiaries eventually acquire beneficial interests.
(3) Can wife Sara take on as her own IRA or is she always the beneficiary because she wasn’t Adam’s wife?
Sara does not get a new stretch for the reason you stated. She was not Adam’s spouse.
Permalink Submitted by Aaron Young on Thu, 2010-05-13 20:30
Thanks ever so much for reassuring me!