Actually, it is neither. Sept 30th is the deadline to exclude a beneficiary by payoff (for example a charity) or disclaimer from factoring into the determination of the designated beneficiary. 12/31 of that same year is the deadline to create separate accounts for which each beneficiary can use their own life expectancy so in many cases it is the most important date.  After that date, separate accounts can still be created, but the age of the oldest beneficiary will apply to all. Further, since the default RMD method is life expectancy in most cases, even if the 12/31 date is missed and the RMD distribution is missed, the stretch can still be restored by making up the delinquent RMDs (PLR 2008-11028). While in the PLR the beneficiary had to pay the 50% penalty for the missed years, by requesting a waiver on Form 5329, the penalty might be waived.

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Permalink Submitted by Richard Fritts on Tue, 2016-08-16 14:00

This is a bit confusing. I have read on multiple sites now that the re-titling must occur by 12-31 of the year following death. You guys are of course the experts but it does leave me to question what happens if someone dies on lets say 12-29 or 12-30. Obvisouly there would not be enough time to re-title at that point. Also, please read Fidelity’s stance below, per this passage taken directly from their website:When there are multiple beneficiariesWhen IRA assets are inherited by several individuals, each beneficiary should set up their own Inherited IRA by December 31 of the year following the year of death.Any beneficiaries who do not separate their inherited IRA assets by that date will generally need to base their MRDs on the age of the oldest remaining beneficiary on the account as of December 31.Is this inaccurate?  

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