Minor Beneficiary
I have a situation based out of Ohio. Grandparent died in April 2008 at 73. She has a Traditional IRA and was receiving RMD’s. She names her children and grandchildren as primary beneficiaries sharing in the IRA. It is the grandchildren I have the question about. The two grandchildren in question are 15 and 17. The parents want to transfer the IRA from Fidelity to AG Edwards and wait for the kids to receive distributions until they are out of college.
Don’t they have to begin receiving distributions each year over the grandparent’s expected life expectancy or receive a lump sum distribution of the amount? What about trustee issues? Because they are minors, does the UGTMA come into play and what do I need to be concerned about there?
Thank you!!!!!!!!!
Permalink Submitted by Jose Morales on Mon, 2008-09-22 21:11
Since the IRA owner was past the Required Beginning Date a mandatory distribution must be fulfilled for the the year of death based on the IRA owners life expectancy factor. Then each year following all of the beneficiaries, regardless of age, must take at least their own mandatory distributions using the single life expectancy method.
Being minors may be an issue for opening a beneficiary IRA depending on state laws and the policy of whatever financial institution you may want to transfer the funds to. You should be able to receive some guidance from the financial institution you want to transfer the funds to regarding any age issues.