RMD auto-withdraw year after participant death

Submitted by Anna Moody on Wed, 2015-06-17 15:59

I am working with an executor of an estate where the RMD was auto-withdrawn the year after the participant’s death. (Apparently the custodian had not been notified of the death and the auto-withdraw has traditionally occurred at the beginning of the year.) The IRA custodian is firm that there is no way to unwind this transaction, and now the beneficiaries are also facing taking out their RMDs for this year as well.

Is there any proper basis for the custodian’s refusal to unwind this? Or any other way to get the ‘toothpaste back in the tube’?

Thank you.



Submitted by Alan - IRA critic on Wed, 2015-06-17 22:09

  • You might make the case that the authorization expired at death because the assets in the account and control of distributions passed to the beneficiary upon the DOD. Custodian may be more inclined to accept the funds back if all this occurred in 2015 and there has been no 1099R reporting yet. You might check into state banking statutes regarding automatic withdrawals of decedents.
  • Note that the year of death RMD must be satisfied by the beneficiaries if the decedent did not complete it. It may solve part of the problem if the executor provided the custodian with evidence that the funds had been transferred to the IRA beneficiaries and that would allow the custodian to report them as such without taking the funds back.

Add new comment

Log in or register to post comments