Combining Inherited IRAs
A 35 year old client’s mother passed away at the age of 65 last month. The 35 year old and his 40 year old sister are 50/50 beneficiaries of the deceased’s mother’s 401k plan. They are also 50/50 beneficiaries of the deceased’s mother’s TIRA held at a different financial institution. Two questions:
1. What is the protocol for transfering the 401k into each of their own Inherited IRAs?
2. Can they each combine the Inherited 401k assets into the other soon to be established Inherited TIRA so they each only have one Inherited IRA?
Thank you!
Permalink Submitted by Alan - IRA critic on Wed, 2019-03-20 15:36
Yes. Since both retirement accounts were inherited from the same decedent and will have the same RMD divisors if separate inherited IRAs for each are established by the deadline (12/31/2020), the inherited accounts for each beneficiary can be combined into a single inherited IRA. That assumes that the inherited 401k is not rolled into an inherited Roth IRA instead.