Distribution from deceased parents IRA
If Mom has died may the children take their distribution directly from moms IRA or must they first set up a bene IRA first and then take distribution?
pj
If Mom has died may the children take their distribution directly from moms IRA or must they first set up a bene IRA first and then take distribution?
pj
Permalink Submitted by mk foss on Wed, 2010-09-08 16:36
The beneficiary IRA has the SSN of the recipient of the benefits, IRS wants that. Beneficiary IRAs are also beneficial in that each child should be able to use their own life expectancy to take distributions and they don’t have to take equal amounts each year. I’m assuming that Mom’s IRA was created directly by her or is a rollover from Dad’s IRA. If Mom has an inherited IRA, her remaining life expectancy must be used for distributions.
Permalink Submitted by Jose Morales on Wed, 2010-09-08 17:16
Even if the financial institution can withdraw the funds directly from the original IRA, they would have to report the distribution under the SSN of the beneficiaries. If the intent is to have the tax burden covered by the deceased person’s estate rather than the beneficiaries, this is not possible unless the beneficiaries disclaim and the estate becomes the default beneficiary.