IRA inherited by son
Hi.
Mom died early Oct 2014. Mom was already taking RMD’s. Current custodian sent son a check for value of IRA. No tax withholdings, no 5 year option, just here’s a check. Check came about 3 weeks ago. I assume that mom’s 2014 RMD was taken first, but don’t know that for sure.
Can we force the custodian to take the check back, re-deposit it, and then do a custodian to custodian transfer into an inherited IRA FBO the son? Son does not need the money now, and will end up paying significant taxes to take it all in one year. We would rather leave it in an IRA for him.
Thanks
Richard
Permalink Submitted by Alan - IRA critic on Fri, 2014-11-21 21:56
I would carefully review the IRA contract as there is a good chance that it does not require this restrictive treatment. If the contract indicates this can be done, it cannot be changed. But if not, the custodian could be forced to cancel the check and adhere to the contract. That said, it is very possible, if not likely, that the son unwittingly signed a distribution request form, and if that mistake was made it is very unlikely that the custodian would accept the check back. Until this can be checked out, son should NOT cash the check since that would just add another hurdle that would be difficult to undo.