IRA beneficiary
I came across this and not sure of the correct answer.
Several persons are non-spouse beneficiaries of a TIRA who do not set up separate accounts by 12/31 of the year following the year of death, thus minimum annual distributions will come out over life expectancy of oldest beneficiary. The decedent died prior to RBD, but beneficiaries did not use 5 year rule.
Question:
Can the decedent’s IRA still be split up using the % allocation of the designated beneficiaries, titled to the decedent-FBO (named beneficieary) and then transferred to their own custodian for RMD’s? If so, would it be up to each beneficiary to use the correct life expectancy of the oldest named beneficiary?
Thanks
BruceM
Permalink Submitted by Alan Spross on Mon, 2008-05-05 03:55
Bruce,
Yes, the separate accounts can still be created, the only difference being that the life expectancy of the oldest beneficiary remaining as of 9/30 of the year following the year of owner’s death must continue for each of the separate accounts.
There are still several obvious advantages of setting up these accounts, but the RMD amount is not one of them. I guess “better late than never” describes this situation.