Estate as IRA Beneficiary
Mom passed away last year at the age of 60 and had no beneficiary listed on her IRA. The custodian did not have a default beneficiary in their document. Mom’s will left everything to her two grown children. Mom’s grown daughter is the executor.
The IRA was just retitled to an Estate IRA and it is titled as follows “Fidelity Inherited IRA (Daughter’s Name), Executor for the estate of Mom’s Name – IRA BDA”.
Can the executor ask the custodian to split the IRA into two Inherited IRAs – one for the daughter and one for the son? Thus allowing them each child to take RMDs at their discretion over the next 10 years? If so, what is the protocol for making that happen?
Thank you!!!
Permalink Submitted by Alan - IRA critic on Tue, 2021-08-03 15:01
The IRS allows the executor to assign the inherited IRA out of the estate to the estate beneficiaries evidenced by many PLRs over the years. Unfortunately, there are still certain IRA custodians that resist acceptance of the assignment letter. If they cannot be convinced, perhaps the inherited IRA can be transferred to a more cooperative IRA custodian. Resistance might be affected by the number of inherited IRAs that must be established, and since many custodians would rather not support assignment, the fewer beneficiaries the better. Note that the 5 year rule still applies to the individual inherited IRAs.