Question about what ends up in the Inherited IRA after assets are transferred
OK, dumb question time…
Let’s say my mom dies with a Traditional IRA with investments in FFFAX (Fidelity Freedom Income Fund) and FDRXX (Fidelity Government Cash Reserves).
When I transfer the assets to a new Inherited IRA as a non-spouse beneficiary, what will I end up with? These same assets, or will they have been sold first and I end up with cash in the account that needs to be reinvested?
Thanks so much. I appreciate everyone who answers questions here.
Permalink Submitted by David Mertz on Tue, 2022-03-15 19:38
The existing assets will be transferred in-kind (as long as the custodian of the new inherited IRA accepts these investments, as would be the case if the custodian of the new account is Fidelity) and you can then change the investments however you like.
Permalink Submitted by thom brookhouzen on Wed, 2022-03-16 20:42
My dad left his IRA account to his Trust as beneficiary. A check was issued from the IRA to the Trust and cashed. Can I take a distribution into an Inherited IRA account
Permalink Submitted by Alan - IRA critic on Wed, 2022-03-16 21:33
No. The inherited IRA was distributed to the trust as a total distribution. If the trustee of the trust and the trust provisions allowed the trust to terminate, the trustee of the trust could have assigned the IRA out of the trust to an inherited IRA and the funds moved there by a direct rollover. This didn’t happen when a check was made payable to the trust, as that check distributed the IRA and the IRA is now closed. The trustee of the trust was the only person with authority to request this distribution, and it might be a costly error.