RMD in year of Death, 70.5; Based on Bene’s Life Expectancy
A client turned 70.5 this year, then passed away in October prior to taking his first RMD. His three children are the named beneficiaries on his IRA.
Question 1: When must an RMD be taken? Its my understanding this can be delayed until 4/1/11 since this was the first one.
Qeustion 2: Will the RMD be based on the beneficaries of the IRA OR on the decedent’s “life expectancy”? I think it would be based on the bene’s life expectancy but wanted to confirm.
Thanks,
Dave
Permalink Submitted by Alan Spross on Sat, 2010-12-04 01:41
1) Since client passed prior to the required beginning date, there is no RMD required for the year of death. The children need to create separate accounts no later than 12/31/2011, and they also must each take their respective RMDs for 2011 prior to year end. There is no distribution required before that date.
2) Yes, the beneficiary’s respective life expectancies will apply using their attained ages in 2011. But if they fail to create separate accounts by 12/31/2011, each of them will be stuck using the life expectancy of the oldest beneficiary. It will probably be more expedient to establish the separate accounts as soon as practical.