Numerous Beneficiaries in IRA
Sizeable IRA of $1,000,000 mostly in one stock of a company ( CHevron) has the following as beneficiaries:
65 year old son 20% ( his sons getting the 20% below)
61 year old son 30%
60 year old son 30%
15 year old grandson 10%
19 year old grandson 10%
Once IRA owner dies, will there be 5 Inherited IRAs set up and will each beneficiary have their calculation based on their ages?
IS it true that we no longer just go by the eldest beneficiary named?
Thank you
Permalink Submitted by Alan - IRA critic on Mon, 2025-03-31 11:23
If the separate inherited IRA accounts are established no later than the end of the year following the year of death, each beneficiary will be able to use their own single life expectancy for annual beneficiary RMDs in years 1-9 of the 10 year rule. Of course, the sons will be left with a smaller distribution in year 10 than the grandsons, but all of these beneficiaries should manage the distributions to avoid having a large balance left in year 10.
The age of the oldest beneficiary only applies to all when the separate accounts are not established by the deadline.
The lack of diversification here is very risky unless there are millions left in other accounts to balance it.