non-spouse beneficiary of IRA in RMD
My client has an IRA and she is in Mandatory Distribution. Right now, her IRA’s beneficiary is her trust and her 3 children are the beneficiaries of her trust.
If we change the IRA beneficiaries to her 3 children, and they transfer their shares to inherited IRAs, do they have to continue distributions based on the mother’s life expectancy or their own life expectancies? And do they get until December 31st of the year following her death to start the distributions?
Permalink Submitted by Alan Spross on Tue, 2009-02-24 23:11
The children would use their own individual life expectancies if separate accounts were created by the end of the year following year of death. The separate account rules do not apply to trust beneficiaries, but if the trust qualified for look through treatment, the age of the oldest trust beneficiary would apply for RMD purposes.
12/31 of the year following death is the deadline for the first RMD. RMDs for 2009 have been waived.