Beneficial IRA consolidation

Submitted by Brian Solomon on Mon, 2019-09-30 18:52

I have a client who is the beneficial owner of her mothers IRA. Her brother (who was also a beneficial IRA owner from the same mother) recently passed away. Can she transfer her recently inherited IRA from her brother with the same beneficial registration, to her exiting beneficial IRA?



Submitted by David Mertz on Mon, 2019-09-30 22:21

  • No, these inherited IRAs are not permitted to be combined because they were not both inherited by your client directly from your client’s mother.  Your client must continue the her brother’s beneficiary RMD schedule as successor beneficiary, taking RMDs as her brother would have been required to take had he not died.
  • Based on IRS guidance, these two inherited IRAs should not be titled the same.  The inherited IRA she received as successor beneficiary to her brother should be titled in a way that includes the name of her brother.
  • https://irahelp.com/slottreport/inheriting-inherited-ira

Submitted by Alan - IRA critic on Tue, 2019-10-01 00:17

  • I agree. I’m sure beneficiaries have combined inherited IRAs before that have differing divisors. While the IRS has not stated the consequences for that, I would expect that the combined inherited IRA would then be subject to the lowest of the two divisors, generating the highest RMD.
  • The IRS guidance on combining inherited IRAs is incomplete. It simply states that to be eligible to combined the IRAs must be inherited from the same decedent. That does not work when a successor beneficiary is involved, and in fact there are scenarios that produce different divisors even if both the original decedent (owner) and the successor beneficiary are the same for two different accounts. 

Add new comment

Log in or register to post comments