Non-spouse inherited ira
I have a client who currently has a non-spouse inherited ira in a brokerage account at another firm. They want to transfer the inherited ira to my firm and put part of it in an inherited ira annuity and the balance in a CD inside an inherited ira brokerage account. Are two separate inherited ira accounts allowed from same inheritance?? If so, does an RMD have to be taken from the annuity AND the CD separately or can the RMD be taken from one or the other to satisfy to total RMD due on both accounts???
Thanks for you help.
Permalink Submitted by Alan - IRA critic on Wed, 2023-07-05 21:58
A direct transfer of an inherited IRA or part of it can be done, but the insurance company must be willing to accept their part. Insurance companies often will not annuitize such contracts, probably due to RMD complexity with such accounts. However, if the transfers can be executed, since the two inherited IRAs were from the same original owner and if they have the same RMD calculation, the RMDs can be aggregated in any combination between the inherited IRA annuity and the non annuity inherited IRA. Brokered CDs would have to be managed to allow for annual beneficiary RMDs if required and/or full distribution in year 10 if the 10 year (or 5 year) rule applies. Normally, it is not advisable to establish an overly complex or illiquid investment scheme for inherited IRAs subject to RMDs.
Permalink Submitted by Pamela Prine on Wed, 2023-07-05 23:42
Thank you so much for your reply. It is greatly appreciated and makes sense. .