Year of death RMD
Client has died, past their RBD. For 2021 the RMD was $12000. Client was taking monthly ACH distributions of $1000. At time of death $9000 has been withdrawn YTD. There are 3 non-spouse bene’s (children). Am I correct that the children now divvy up the remaining RMD of $3000 so each one is responsible for $1000 each by 12/31? Or can one of the three withdraw $3000 and satisfy it in the aggregate?
Permalink Submitted by Alan - IRA critic on Wed, 2021-10-13 14:33
IRS Reg 1.401(a)(9)-4(a) indicates that the year of death RMD must be satisfied by “a beneficiary”. That means that any of the beneficiaries or some combination thereof can complete the year of death RMD. Therefore, one of the children could distribute the entire 3000 balance and the others would not have to participate. Of course, this requires communication and follow through. If any of the others do not trust the distributing beneficiary to follow through and that beneficiary in fact fails to take a distribution, IRS practices do not appear to hold any beneficiary responsible for more than their individual pro rata share (1,000).