Inherited IRA at Second death
Our client inherited an IRA from her mother, she passed away and now her younger husband and kids are named beneficiaries of the inherited IRA.
It is my understanding that when we do the annual RMD calculation, we do not use the birthdates of the husband or children but only the mother and grandmother, is this correct?
Permalink Submitted by Alan - IRA critic on Thu, 2016-10-20 23:42
The successor beneficiaries must continue to use the RMD method the client was using. For years after the death of the client, the divisor the client was using is reduced by 1.0 each year just as if client was alive. In other words you are correct that the ages of the husband and children are immaterial. Husband is also NOT allowed to rollover his portion.
Permalink Submitted by Mark Hilgenberg on Fri, 2016-10-21 16:04
Thanks Alan, yes, he can’t roll it to his own but he can take it as an inherited in his name using her RMD schedule, correct?
Permalink Submitted by Alan - IRA critic on Fri, 2016-10-21 16:47
Yes, correct. The inherited IRA should be re titled showing the name of the husband as beneficiary and the deceased client. The name of the original owner should not continue on the account.