Inherited IRA distribution
One of my clients (45 yrs. old) just inherited a third of his Mother’s $150K IRA and she passed away in 2008 at the age of 65. Because he wants to take his RMDs over his lifetime, we established a decedent’s IRA for him with a new custodian and instructed the current custodian to execute a ttee to ttee trsfr to the new company. I have advised him that he is not required to take his first RMD until 12-31-09 in order to preserve the stretch option. However, when the current custodian executed the trsfr, they also mailed a check to him in the amount of $2,500 and told him that they were required to send it to him.
There are two questions that I have: First, is there some requirement that I am unaware of that actually did require them to send him a distribution? Second, is there any reason that he can’t go back to the current custodian and have them reissue a check to the new custodian?
Thank you!
Anthony
Permalink Submitted by Alan Spross on Mon, 2008-07-28 22:46
I can’t imagine what they were thinking. She was nowhere near her required beginning date, and he would not even have an RMD requirement for 2008.
In addition, the 2500 is about double what his RMD might have been for his share. By chance, could this IRA have been inherited by his Mother from someone else?
Barring that possibility or a plausible explanation, I would return the check to the original custodian to be cancelled with a request that a supplemental direct transfer of the funds be made to his inherited IRA due to non compliance with the IRS 2002 RMD requirements.