IRA left to an estate
When someone leaves their IRA to their estate, after probate are the funds delivered to the beneficiaries of the estate or does the estate have to stay open with the funds remaining inside the estate, and are there different RMD rules if the deceased died prior to or after their RBD when they died and left their IRA to their estate?
Permalink Submitted by Alan - IRA critic on Thu, 2023-11-02 16:03
If the decedent passed prior to RBD the 5 year rule applies, and if after RBD the remaining single life expectancy of the decedent applies. But the executor will want to close the estate within a reasonable time, and therefore will normally attempt to assign the inherited IRA out of the estate to the estate beneficiaries as separate inherited IRAs. The estate beneficiaries can then manage their own accounts and name their own beneficiaries but their RMDs will be the same as they would have been with estate ownership. Most custodians will accept such assignment, but a few do not and without custodian acceptance of the executor’s request to assign the IRA, the account would have to be transferred to a more cooperative custodian or the estate would have to make the choice of remaining open or accepting a lump sum or accelerated distribution allowing the estate to be closed.