A. Client passed away w/ no surviving spouse. I told the heirs that they had to follow specific guidelines for the inherited IRA. I said they cannot transfer the IRA into an inherited IRA. You first have to change the existing IRA into an Inherited IRA with the existing company. Then you can transfer to another company of choice as an inherited IRA. Is this not correct?

B. They decided to talk to another representative and they transferred the IRA out to brokerage firm as, “my client FBO inherited IRA” (something like that) before changing the status with the first company. Did they not just lose the stretching cabability for 4 generations?

C. is there anyway to reverse it?

D. Does this mean they have to take out the RMD based on the Mothers rate per IRS and then its done?

E. Please tell me the drawbacks on what they did?

F. the mother did not receive all of the RMD for 2007 (She passed away in 2007). Do they have to take the rest of the RMD out for the mother this year?

Anything else I should know, please tell me.

Thank you very much
Douglas