Hi, we are presently taking over my dad’s financial affairs, as he is in hospice care.

He has an IRA that we think he contributed to himself when he was working for himself, we do not know its source for sure — he had a wife who died in 1998, but I don’t think it included funds from an IRA of hers, and he also worked as a salaried employee as well as working for himself. It presently has $175,000 in it, up from the mid $160s last year. The original paperwork setting up the IRA is lost. The IRA custodian is Merrill Lynch, and it is designated as a rollover IRA.

Dad named his Living Trust as beneficiary of the IRA in 2015. It is clear upon reading the trust who the individuals are that would inherit the assets of the trust, if any assets are left when he dies. There is a specific list, with percentages.

First question — is there a value to having my sister (the trustee) resubmit a Beneficiary form for the IRA, naming the individuals that my dad’s trust names, rather than just naming the trust? Can she even do this as his trustee, or is it too late? (She is officially his trustee, Dad is not able to sign anything.)

Also, the big question is, I cannot make the math work. Merrill sent him a note last year saying his “award” (I guess this means his yearly required distribution) was $10,000 that year. But he has $175,000, and he is 88, and his (now) wife is also 88. It seems to me that the distribution should be more like $14,000. (I will admit that I didn’t calculate it with the mid-$160s figure he had last year. Does that make such difference?)

I am concerned that they seem to have gotten it wrong, and there might be penalties. The only thing I can think might have happened is that his prior wife was quite a bit younger, and she would have probably been named the beneficiary when he originally opened an IRA, since he didn’t have a trust when they were married. When I compute her age into the mix, the distributions are supposedly around $10,300, more like what they told him last year that he was getting. If his custodian simply continued to use his prior wife’s age and the assumption that she was his beneficiary and never changed it, this would mean the distributions have been too small since her death in 1998. (And, eeek! I might add.) Would the IRS have noticed if the distribution amount was wrong and sent a note to Merrill Lynch long ago and straightened things out? (So I don’t need to worry?) My dad would NEVER have known if the distributions were the correct amount or not. I also don’ t think it would have occurred to him to tell Merrill that his wife died and he remarried.

If the amounts have really been wrong since 1998, would Dad be stuck for fines for underpayment for all of those years? That seems impossible. He was naive, but not doing this on purpose.

Thanks.