These beneficiaries should establish separate accounts for each no later than 12/31 following the year of owner’s death. That way, each one can use their own life expectancy for RMDs and have total control over their own accounts including investments, naming successor beneficiary, taking more out than RMD or even a lump sum distribution.

However, if they have missed the deadline, they can still set up separate accounts, however then the RMD for ALL accounts must be based on the oldest beneficiary of any of them.

And if they do not set up separate accounts, the accounting required of the custodian can become confusing, since each beneficiary has the same RMD requirement, but if they opt to take out more, then the accounting must be established to make sure that each is still limited to 25% of the total. Investments choices become difficult to make unless all of them are on the same page and agree to share the results of an agreed decision for investing the total account. In short, they can still make separate decisions on how much to take out, but then the accounting becomes challenging. Timely created separate accounts are the way to go, with late separate accounts being the next best bet. Continuing one account with 4 different interests can become a real mess.

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