Client has Traditional IRA and Inherited Traditional IRA…passed away
Client passed away, he had a Traditional IRA and an Inherited Traditional IRA from his mother. Can his beneficiaries (same for Traditional IRA and Inherited Traditional IRA) combine the two IRAs into one Inherited Traditional IRA, or do they need to remain as separate Inherited IRAs?
Permalink Submitted by Alan - IRA critic on Thu, 2022-12-29 21:32
They should not be combined, as they were not inherited from the same original owner. The beneficiary distribution requirements may also differ. Would have to know if mother passed before or after her RBD, and also if client passed before or after his RBD in order to determine the beneficiary obligations.
Permalink Submitted by Trish Turner on Tue, 2023-01-03 15:00
Thanks for confirming, mother passed after her RBD, son passed before his RBD.
Permalink Submitted by Alan - IRA critic on Tue, 2023-01-03 15:41
For client’s owned IRA, because he passed prior to RBD there will be no annual RMDs required within his 10 year rule for his beneficiaries. For client’s already inherited IRA he will have to continue mother’s RMD schedule if the original owner of that IRA passed after their RBD. The only situation where these accounts could be combined is if mother inherited from her spouse and failed to take a beneficiary RMD, in which case she would have defaulted to ownership. If that occurred, the new beneficiaries could combine these inherited IRAs as mother would be treated as the owner of both. Annual RMDs would be required.