inherited ira w/out any beneficiary
Need help!
My Father passed away 12/2006. He was 80. He has 2 IRA’s. On both IRA’s, my mom (who passed before my dad) was named beneficiary and there are NOT any contingenet beneficiaries listed. There are 4 sons with everything distributed equally to the 4 per the Will. State of WI in case there are state laws that come in play.
What can we do with the IRAs? Can the 4 of us divide the IRA’s into each own’s Inherited IRA? IF so, what would the RMD be? etc.
Thank you for your help,
JSR
Permalink Submitted by Alan Spross on Sat, 2007-08-04 01:54
First, the IRA agreement should be examined for default beneficiary provisions that would apply in this case. But you will probably find the estate is the default, and therefore the IRA will be subject to probate.
Since he passed so late in the year, he probably had taken his RMD, but if not, the estate should take it and also the 2007 RMD based on his remaining life expectancy if the estate will not be terminated prior to year end. When the estate terminates, the IRA can be assigned to the individual beneficiares and separate accounts can be created, but each of their RMDs will be based on the remaining non recalculated (reduces by 1.0 each year) divisor from Table I in Pub 590, using your father’s age in 2006 for the starting point. The divisor therefore would be 9.2 for 2007, 8.2 for 2008 etc.
If he was behind in his RMDs for 2006 or prior, these must be made up ASAP, however, the excess accumulation penalty can be waived by attaching an explantion and filing Form 5329 with his final return along with evidence of having made up the missing RMDs.