Inherited IRA
I have been referred to a client who is the beneficiary of her mother’s 403B the problem is the her mother died 11 years ago and she was only notified a year ago by the carrier. The funds are in Forrestors and they have been fiving her the run around do to her getting married and having an age change. The mother was not 70 1/2 at death. My question is does she need to pick up the last 11 years of RMD, or can we transfer the funds to an inherited IRA and wait till her retirement age to with draw the funds.
Lastly,if there are distribution problems additional tax and penalty is the carrier have any responsibility.
Thank you,
Bob Belvedere
Permalink Submitted by Alan - IRA critic on Fri, 2018-06-29 15:33
Client’s marriage and age do not affect the delinquent RMD situation. Since mother passed prior to her required beginning date assuming she was not still working at the time, the 403b plan document needs to be checked to determine if the 5 year rule was the default method rather than client’s life expectancy. If so, client will have to drain the account. If not, client can probably calculate the life expectancy RMD for each year (except 2009 which was waived), withdraw that amount and file a 5329 for each year requesting that the penalty be waived. In no event can client treat this as an owned IRA, as she is a non spouse beneficiary. She will either have to drain the account or make up the life expectancy RMDs to the present and will have to file Form 5329 in either case.