Inherited Beneficiary IRA
Hello- Client’s mother passed. She was the beneficiary of her father’s IRA (client’s grandfather). Son inherited it after mother passed. Can he stretch it any farther, or does he have to distribute it? Thanks!
Hello. Can Mom’s Bene IRA and Trad IRA be merged into Bene IRA for son with 10 year rule for distribution?
Yes, but only if the inherited IRA is titled showing the son as beneficiary of mom, and both of the inherited IRAs are subject to the 10 year rule.
True, but now that Mom has passed, son will be subject to the 10 year rule. He will also be subject to the 10 year rule for the IRA Mom owner that he inherited directly. Since son will be under the 10 year rule for both of these IRAs, they can be combined into a single inherited IRA, titled with son as beneficiary of Mom.
If the GF passed away in 2020, then the 10-yr clock started ticking for the mother then, and it does NOT get reset for the sun, so he’d have one year less – total of 10 yrs since GF’s death.
You are correct. There is only one 10 year rule per inherited account. I figured there was a very low chance of GF passing after 2019, but certainly it could have happened, and if so the son as successor beneficiary would get no time extension and the inherited IRA would have to be drained by the end of 2030, or end of 2031 if GF passed in 2021.
Permalink Submitted by Alan - IRA critic on Fri, 2021-09-03 17:10
Client will be subject to a new 10 year rule, meaning no annual RMDs, but the inherited IRA must be drained by 12/31/2031. However, if mother did not complete her 2021 beneficiary RMD, client does need to complete that RMD before year end 2021.