Inherited Inherited IRA

Submitted by David Peloquin on Fri, 2023-06-16 02:29

Background: Our client inherited his father’s IRA many years ago. Our client was taking RMDs prior to his passing. Our client recently passed away and the non-family beneficiaries will inherit the inherited IRA.

Questions:
1) How should the inherited inherited IRA be titled? Should our client be listed as the decedent on the inherited inherited IRA OR should the original IRA owner (our client’s father) be listed as the decendent?
2) If our client is listed as the decedent rather than the original owner, are we able to combine this inherited inherited IRA with other inherited IRA accounts?
3) What factor (life expectancy table) should we use to calculate the RMD for the new non-spousal beneficiaries?

Thanks for any feedback.



Submitted by Alan - IRA critic on Fri, 2023-06-16 03:55

  1. Client should be listed as decedent. Each beneficiary of client should establish a separate inherited IRA account titled with them as beneficiary of client. Original owner is no longer included. 
  2. Only if there are other IRA accounts also inherited from father by client with the same successor beneficiaries. 
  3. If father passed after his RBD, the successor beneficiaries will have to continue the RMD schedule of client in years 1-9 of the 10 year rule. If father passed prior to RBD, the successor beneficiaries will be subject to the 10 year rule and the annual RMDs can stop. You will have to determine if father passed prior to his RBD or not and that will require finding out his DOB and DOD.

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