403B Question
I have a client who passed away in November 2020. He was 62 years old. He had an AIG 403b account with no named beneficiaries. Per AIG “these accounts have two different groups and since the accounts did not have a named beneficiary, the groups have defaults that we have to use. One one account, the default was the estate; on the other it was listed as living relatives in a particular order.”
My question is for the account that defaulted to living relatives in a particular order. AIG allowed these monies to be rolled over into individual IRA BDA’s at an outside financial institution. Do these individual IRA BDA accounts need to be distributed within 5 years considering there was no named beneficiary or does it follow the SECURE Act (10 years) because it defaulted to living relatives in a particular order?
Thank you in advance.
-Scott
Permalink Submitted by Alan - IRA critic on Tue, 2022-02-08 19:55
AS long as those relatives were identifiable, they are treated as designated beneficiaries, and the account does not become part of the estate. The direct rollovers to inherited IRAs are not allowed had the estate been the beneficiary. If any of the individuals are not more than 10 years younger than client, they can either stretch the inherited IRA or opt into the 10 year rule. Any other non disabled beneficiaries fall under the 10 year rule.