Inherited Roth IRA

Submitted by Larry R. Awbrey on Thu, 2021-08-19 16:14

I have a client who inherited a portion (five children) of a Roth IRA from her father who passed in February 2019.
The account is registered in a trust with a TIN dated 4/4/2019.
She is the trustee of that trust.
She desires to do a trustee/trustee transfer of the account with a value of 300k.
The successor trustee and I have concerns since the decedent or date of death are not reflected in the registration.
She deferred RMD in 2020, and must take one before YE 2021.
Thanks for any guidance on the next steps if any would be appreciated.



Submitted by Larry R. Awbrey on Thu, 2021-08-19 17:30

Inherited Roth

Submitted by Alan - IRA critic on Thu, 2021-08-19 19:51

Since father passed in 2019, the RMD requirements in this case are not affected by the Secure Act. However, the trust was either qualified for look through or it failed qualification. By 10/31/2020 the trust info had to be provided to the IRA custodian for the trust to be qualified. If qualified, the RMDs for all beneficiaries are determined using the age of the oldest child. Same rules apply whether TIRA or Roth IRA. If not qualified, the 5 year rule will apply with total distribution of the inherited IRA due by 12/31/2025 due to 2020 RMD waiver.
The trust provisions determine whether she can distribute the IRA to the trust beneficiaries.
Title of inherited IRA should show the name of decedent and name of the trust, or if the IRA can be distributed out of the trust, the name of the beneficiary and decedent.

Submitted by Larry R. Awbrey on Thu, 2021-08-19 21:28

Thanks for the reply.I have a meeting scheduled with the client to call the custodian to confirm the details. 

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