Bene missed the Dec 31 of the year following the date of death to make a transfer
Beneficiary missed the 12/31 deadline of year after death to rollout inherited IRA. Insurance company is saying that lump sum distribution is only option. The delay was outside of clients control due to court delays (a conservatorship had to be approved by a judge). Judge didn’t approve until 12/31/24. Any ideas to allow for an inherited IRA transfer?
Permalink Submitted by Alan - IRA critic on Tue, 2025-01-21 16:44
The insurance company has no way of knowing that the decedent might have completed his year of death RMD from another IRA before passing, or that the beneficiary(s) did not do so from other inherited IRAs of this decedent in 2024 if the decedent did not.
Rather, they may just be using the year of death RMD as an excuse to make a lump sum distribution. Most IRA custodians do not force out distributions, but insurance companies might do so. If they make a total distribution, there is nothing that the beneficiary can do about it.
If the company just wants to rid themselves of the inherited annuity, the beneficiary might try setting up an inherited IRA with a brokerage IRA custodian and request that they attempt to transfer the account out of the insurance company to their inherited IRA. That may or may not work, but it allow the insurance company to terminate the account without large tax costs to the beneficiary.
I hope that those who read this will think about their beneficiaries when they purchase IRA annuities.