Bene IRA from mother
We have a client that his mother had a beneficiary IRA from her husband (husband passed away in 2002)and now the mother has passed away March 2015 leaving this IRA to her 2 children). The registration is already in our clients name as a beneficiary IRA benefit of his father’s name (the original owner of the IRA).
We know that we need to make sure his mother satisfied her RMD for 2015 and that our client will begin his RMDs in 2016. Since this Beneficiary IRA has been passed on to a second beneficiary, will we need to calculate our clients RMD any different.
Permalink Submitted by Alan - IRA critic on Mon, 2015-06-29 19:10
Generally, a successor beneficiary must continue the same RMD schedule of the original designated beneficiary. If the mother ever missed taking a beneficiary RMD after 2002, she would have defaulted into ownership of the IRA that year, which would allow the children a much longer stretch period since in that case they could be treated as designated beneficiaries rather than successor beneficiaries. It may be worth checking into that possibility, but you would need to know the date of births of both parents in order to determine what mother’s RMD actually was as a beneficiary.
Permalink Submitted by Wendy Mommaerts on Tue, 2015-06-30 15:03
Found out our client has two inherited Bene IRA’s from his mother (both of these were his mother’s bene IRA from her husband). According to your reply, our client will continue to follow his mother’s RMD. Since these accounts are both bene IRA’s form his mother, can we combine them into one bene IRA?
Permalink Submitted by Alan - IRA critic on Tue, 2015-06-30 17:02
Yes, they can be combined as long as the husband was the original IRA owner and mother treated them both the same using the same RMD divisor for each. Note that the client’s inherited IRAs should be titled showing client as beneficiary of mother. Father’s name can now be dropped. This conforms with the 5498 Inst, p 19.