Title of an inherited Roth IRA

Submitted by Mollie Kennard on Fri, 2018-05-11 14:27

My brother, sister and myself inherited a Roth IRA from my father who died in Jan 2018.
My father had inherited this same Roth from our oldest brother who died September 2017.
So for us three it is an “inherited, inherited Roth IRA.”
The account was a trustee to trustee transfer at Vanguard.
Vanguard has registered/titled it in this manner:

(MY Name)
ROTH IRA VFTC AS CUSTODIAN
BENEF (older brother’s name who died in Sept 2017)

1. Is the registration correct? Since we actually inherited the Roth from my father not my brother?
2. Am I correct that we three siblings will take an RMD in 2018 based on My father’s age at death from the single life expectancy table?

Thank you for your help.



Submitted by Alan - IRA critic on Fri, 2018-05-11 20:51

  1. The IRS does not specify how a beneficiary IRA must be titled and each custodian’s processing platform may produce different results. However, the IRS DOES specify Form 5498 reporting requirements and in the case of successor beneficiaries the Form 5498 Inst indicate that the current beneficiary is shown in addition to the beneficiary they inherited from. The original owner or earlier beneficiary names are dropped. Therefore, Vanguard has deviated from the Form 5498 Inst. IF their 5498 is consistent with the actual title of the inherited IRA. Actually, the IRS’ oversight of inherited IRA RMDs is close to nil, so no one is reporting any negative fallout from the title format that IRA custodians are using.
  2. Yes, the siblings must all take their respective shares of what father’s RMD would have been had he lived.
  3. If the Roth value and other conditions justify, your father’s executor could file a disclaimer on behalf of father, who would then be treated as pre deceasing your brother if your brother named contingent beneficiaries. That would result in a considerable longer stretch period with individual age based RMDs for each sibling. Disclaimer laws can vary by state.

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