Inherited IRA-DBA Inherited a 2nd time? Anything special during probate?
This question is in regard to whether or not there are any special considerations, guidelines, or headaches in the handling of an IRA-DBA during probate administration.
Context:
This IRA-DBA was passed from a grandparent to a parent, who has subsequently died. The IRA-DBA had no named beneficiaries.
The deceased died intestate. No spouse. 3 equivalent surviving beneficiaries under the state’s probate guidelines (3 siblings)
No debts. No disputes. A simple probate (I assume)
Are there any concerns or considerations for administering this asset beyond possible effects on the deceased’s final tax returns?
The only thing I could find were the deadlines for payouts and liquidation on a relatively short timescale (eg Stock Act)
Thanks
Permalink Submitted by Alan - IRA critic on Sat, 2021-10-09 01:12
While parent failed to name an individual successor beneficiary, nevertheless the parent’s estate becomes the successor beneficiary, and the 10 year rule applies to the estate, and to inherited IRAs assigned out of the estate by the executor to the estate beneficiaries. Therefore, if parent passed in 2021, the beneficiaries of the estate will have to drain their inherited IRAs by 12/31/2031. The executor will want to assign the IRA to the beneficiaries in order to be able to close the estate. The estate beneficiaries can then manage their individual inherited IRAs in their own.
If parent was taking life expectancy RMDs and did not complete their 2021 RMD before passing, the 2021 RMD must be completed by the estate or by the beneficiaries of the estate if the assignment can be completed before year end.
Other than completing the year of death RMD, there are no annual RMDs for anyone until 2031 when the inherited IRA accounts will all have to be drained.