Beneficiary IRAs
My client died this year leaving a beneficiary IRA (that she inherited from her father many years ago) to her 3 sons. What is the correct way for them to handle the RMD’s?
My client died this year leaving a beneficiary IRA (that she inherited from her father many years ago) to her 3 sons. What is the correct way for them to handle the RMD’s?
Permalink Submitted by Alan - IRA critic on Mon, 2024-11-04 14:26
The sons are successor beneficiaries, therefore their ages are immaterial. They must continue the RMD schedule that you client was using, reducing her divisors by 1.0 each year. They are also subject to the 10 year rule, so if there is still a balance in 2034, that remaining balance must be distributed. The sons can create separate inherited IRA accounts by direct transfer for their convenience but that will not affect their RMDs. The inherited IRAs may or may not last to 2034 depending on client’s RMD schedule.
The sons are also jointly responsible for completing client’s 2024 beneficiary RMD if she did not do so prior to passing. The deadline for that will be 12/31/2025.