INHERITEED ROTH IRA
HOW TO REGISTER A NEW BDA ROTH IRA ACCT. AFTER THE FIRST BENEF. DIES AND IT GOES TO THE SECOND BDA BENF.
FIRST, ORIGINAL, ROTH IRA ONWER, EARL, DIES 20 YEARS AGO AND LEAVES MONEY TO TAYLOR AS A BDA INHERITED ROTH IRA .
BOB DIED IN JULY 2025 AND LEAVES MOEY TO FRANK BDA INHERITED ROTH IRA FROM BOB. HOW WOULD THE NEW BDA ACCOUNT READ? IS THE STRECH STILL ALOWED OR DO YOU USE THE 10 YEAR RULE?
IS IT EARL DECD. FBO FRANK OR TAYLOR DECD. FBO FRANK INHERITED ROTH IRA?
THANKS,
FRANK YOUONGSTROM
Permalink Submitted by Alan - IRA critic on Wed, 2025-10-01 18:22
It does not appear to matter. Whatever format the processing system of the IRA custodian requires has never been a problem for the IRS. However, the IRS seems to prefer that the title show “Frank as beneficiary of Bob” in this situation. The name of the owner can be dropped.
The number of characters is limited in these processing systems, so very few custodians will attempt to show more than 2 names.
The RMDs in this case are based on the life expectancy of the first beneficiary, no matter how many later beneficiaries inherit the account. In addition, for the first death after 2019, the 10 year rule will also apply. If that death was in 2025, then the inherited Roth must be drained no later than 2035, although the RMD divisor could drop to less than 1 (meaning full distribution) prior to 2035.