Inherited IRA
Age 66 person inherits 33.33% of mothers IRA, two sisters inherit balance. Can proceeds be divided and each person take their 33.33% and make their own decisions as to roll over and RMD or taxable distribution ?
Age 66 person inherits 33.33% of mothers IRA, two sisters inherit balance. Can proceeds be divided and each person take their 33.33% and make their own decisions as to roll over and RMD or taxable distribution ?
Permalink Submitted by Joel Broersma on Mon, 2009-12-07 21:50
Shouldn’t be a problem, I did it for a client & his 4 siblings last year who’s father died. Once the IRA is split, beneficiaries can do with it what they please (cash out, Stretch IRA, etc.) regardless of what the others do with their portion.
Permalink Submitted by mk foss on Mon, 2009-12-07 22:56
A “rollover” is not available. Each beneficiary can establish a “beneficiary IRA” and have his/her share of the mother’s IRA transferred to it. There must be an asset transfer and not a rollover – because rollovers from IRAs by a nonspouse beneficiary are illegal.
After the transfer to a beneficiary IRA (aka inherited IRA), each beneficiary can use their separate life expectancies to determine distributions provided that the mother’s IRA is split before December 31 of the year following her death.
Permalink Submitted by James H. Dean on Tue, 2009-12-08 16:35
[quote=”[email protected]“]A “rollover” is not available. Each beneficiary can establish a “beneficiary IRA” and have his/her share of the mother’s IRA transferred to it. There must be an asset transfer and not a rollover – because rollovers from IRAs by a nonspouse beneficiary are illegal.
After the transfer to a beneficiary IRA (aka inherited IRA), each beneficiary can use their separate life expectancies to determine distributions provided that the mother’s IRA is split before December 31 of the year following her death.[/quote]
Thanks for the response