Inherited IRA to deceased mother and subsequently to her grandchildren

Submitted by Nick Mamula on Thu, 2014-08-07 16:36

Our uncle recently passed away. His IRA had our grandma named as sole beneficiary. She passed away one week later before she could have the IRA money transferred to her beneficiary IRA.

Can the executor of grandma’s estate roll over my uncle’s IRA assets to her beneficiary IRA account (which has not been opened yet) and can the executor roll over the IRA assets from her beneficiary IRA or estate to my beneficiary IRA? Can this be done without a private letter ruling from the IRS? Don’t really want to pay taxes on the lump sum if I can roll over to my beneficiary IRA and make withdrawals based upon my life expectancy table.



Submitted by mk foss on Thu, 2014-08-07 21:57

The term “roll” isn’t used in the context of IRA beneficiaries. Since the Grandma was alive when the uncle died, she would be the beneficiary. Since she didn’t have time to name beneficiaries of the inherited IRA, it’s likely that her estate will become the beneficiary. An inherited IRA can be established for her estate. Distributions will be made based on the Grandman’s age.

  • Another possibilty would allow Grandma’s personal representative to disclaim the IRA. Then uncle’s contingent beneficiary would be the beneficiary. If there was no contingent beneficiary, his life expectancy (if he was over 70-1/2) would be used for IRA distributions – the IRA would be transferred to a beneficiary IRA in the name of Uncles’ estate.
  • There is no circumstance where the entire IRA is taxed at once. When the estate is closed (Grandma’s or Uncle’s), the executor can have interests in the IRA assigned to the estate beneficiaries.
  • No ruling should be required but you’ll need a lot of help from the IRA custodian or estate attorney to make this all work as it should.


Submitted by Alan - IRA critic on Thu, 2014-08-07 22:13

There is no need for a PLR, but the IRA agreement must be carefully examined to determine the default beneficiary for your grandma. It may well be her estate and your post infers that you are her will beneficiary. If so, her executor can have the IRA custodian set up an inherited IRA for you. However, you will only be able to use your grandmother’s single life expectancy for your RMDs. You will not be able to use your own life expectancy. If the IRA custodian resists or wants to distribute a lump sum to the estate, the IRA can be transferred to another custodian.



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