Beneficiary IRAs

Submitted by Bob Lagonegro on Tue, 2017-05-30 19:06

A beneficiary IRA was transferred into the wrong Owner/Beneficiary IRA.

Surviving spouse (Dad) did not transfer deceased spouse’s (Mom’s) IRA to personal IRA, but left in deceased spouse’s (Mom’s) name as beneficiary IRA. When Dad died, their son inherited two non spousal IRAs, one from Dad, as a beneficiary IRA, now calculated based on son’s age, and second beneficiary IRA, based on Mom’s age. If Beneficiary IRA of Mom was inadvertently transferred into Beneficiary IRA of Dad’s, and over a year has gone by, how does one untangle Mom’s Beneficiary IRA from Dad’s Beneficiary IRA? Thank you.



Submitted by Alan - IRA critic on Tue, 2017-05-30 23:53

  1. This is a long shot, but first the son should do some research to determine if Dad came up short with his beneficiary IRA RMD in any year after Mom died. If he did, then he acquired ownership of the IRA by default and the problem would be solved since the RMD divisors for both IRAs would be the same and the combination would be fine. The inherited IRA should be titled showing son as beneficiary of father. Mother’s name would be removed.
  2. Plan B – if the above investigation does not locate any shortfall in Dad’s beneficiary RMDs, then 2 inherited IRAs with different RMD divisors have been improperly combined. The account should still be retitled as above, however the RMD divisor for the entire account should be the lower divisor (higher RMD) based on Dad’s beneficiary RMD schedule. Any RMD shortfall must be made up. No benefit in trying to untangle as there are no specific IRS guidelines for doing so, and the custodian would likely resist, and might even distribute the entire IRA or take some other unpredictable approach.

Add new comment

Log in or register to post comments