Proper Title for Inherited IRA after First Bene Died
Hi,
We are trying to determine how to title a successor beneficiary (inherited inherited) IRA. Here is our situation:
Background:
Anna died and her IRA transferred to an inherited IRA for her daughter Margaret, titled Anna DCSD IRA FBO Margaret.
Then, Margaret died, and her inherited IRA is now passing to her sister, Monica.
The question:
Does the new inherited IRA maintain the original decedent’s name (Anna DCSD IRA FBO Monica) or does the title instead contain the deceased first beneficiary’s name (Margaret DCSD IRA FBO Monica).
I know that some custodians have the flexibility to name all three parties, but we do not, so I’m wondering which titling is correct if we are limited to two names.
Thanks!
Permalink Submitted by Alan - IRA critic on Thu, 2023-12-28 14:49
The IRA custodian’s titling provisions will determine how the IRA is now retitled. If the custodian chooses to show all 3 names and their processing platform can accomodate this they can, but more likely most will drop the name of the original IRA owner and show “Margaret DCSD FBO Monica”. Of course, the 2 name format does not even provide clarity that a successor beneficiary has inherited.