Beneficiary distributions
My client died at an early age and he was the beneficiary of his deceased mothers IRA-he had neglected to take RMDs for a number of years–at death he was married however he never named a beneficiary on the IRA account. The trustee (Morgan Stanley) is saying that the widow must take the entire distribution now with no option of life payments–is this correct?
Permalink Submitted by Alan Spross on Thu, 2009-11-19 00:21
It may well be correct, but is subject to the additional details of the age of the original owner at death and what the IRA agreement said at the time of death about election deadlines. The excess accumulation penalty will also need to requested to be waived on Form 5329. That could amount to 50% of the original amount plus interest.