Death of beneficiary of inherited IRA
I understand that the beneficiary of an inherited IRA can name a beneficiary of that IRA. What are the withdrawal rules for the 2nd beneficiary?
I understand that the beneficiary of an inherited IRA can name a beneficiary of that IRA. What are the withdrawal rules for the 2nd beneficiary?
Permalink Submitted by Anonymous (not verified) on Thu, 2009-10-29 17:08
Very simple: The RMD schedule for the “first” Inherited IRA must remain (no further stretch out option).
I am assuming no spouse is involved here?
pmk
Permalink Submitted by Tina Frey on Thu, 2009-10-29 17:36
Thanks,
The original beneficiary is not the spouse, but the 2nd beneficiary is. I assume that the beneficiary can be changed.
Permalink Submitted by Alan Spross on Thu, 2009-10-29 20:00
A successor beneficiary on an inherited IRA should always be named as contingent beneficiaries named by the original owner are void with respect to primary beneficiaries who are living upon the owner’s death.
If the successor beneficiary on a non spousal inherited IRA names their spouse as successor beneficiary, the successor beneficiary receives none of the usual spousal options. If the original beneficiary passes, their successor spousal beneficiary must continue the RMD schedule of the first beneficiary, and can never assume ownership of the IRA.
The IRA account would then be re titled showing the entire inherited interest succession from the beginning.
Eg “Joe Smith IRA, deceased xx/xx/200x, FBO Ann Jones, deceased xx/xx/200x FBO Bill Jones, successor beneficiary”