RMD in year of Death
My dad 85 years old passed away on January 2 2021. He had 6 different IRA accounts with different mutual funds. He did not take any RMD for 2021 because he passed so early in 2021.
Three of these IRA had me as designated beneficiary, Two of them had his trust as designated beneficiary, and the last one had my mother as designated beneficiary but she passed away several years ago and no contingent beneficiary. So apparently this will go to his probate estate.
My question is
Do we have to take 3 different RMD’s or can just one of beneficiaries fully satisfy the combined RMD requirement ?
Thanks
Permalink Submitted by Alan - IRA critic on Wed, 2021-11-03 23:59
One of the beneficiaries could have completed the year of death RMD if all 6 accounts had the same beneficiaries, or if there had been just one inherited IRA that included all 3 different beneficiaries. But your situation is much more complex because there are multiple inherited IRAs with 3 different beneficiary combinations. As a result, the fewest possible distribution combinations are the following:
For your 3 inherited IRAs, you can take the entire RMD for just those 3 accounts in any combination from those 3 accounts.
The estate inherited IRA can only satisfy the RMD for the estate inherited IRA. Any distribution to the estate cannot be applied to the year of death RMD for either you or the trust.
Likewise, the two trust inherited IRAs must satisfy the year of death RMD for the trust inherited IRAs and distributions cannot be credited to the year of death RMD for yourself or the estate. Since two inherited IRAs went to the same trust, the RMD for those two inherited IRAs can be satisfied by taking just one distribution from either inherited IRA into the trust.
So you are correct that the fewest number of distributions to complete the year of death RMD is 3, made to you, the estate, and the trust respectively from the IRA accounts for which the 3 entities are the beneficiaries.