IRA beneficiaries distributions
For some reason an insurance company has me doubting myself on this one but here it goes.
We have a client who died and left some IRA money to his 2 sons. One is wanting to take some of the money as a distribution and make the remaining portion as a stretch. My question is this: Can he split the money or does the whole amount have to be either distrbuted or transfered to a stretch account? I didn’t think making a partial distribution was a problem. Am I wrong??
Thanks for your help!!!!!!!!!!!!!
Permalink Submitted by Alan Spross on Thu, 2010-05-20 18:17
You are correct. A beneficiary can always take out more than the RMD in any year desired, but cannot take out less without triggering the excess accumulation penalty.
They can also create separate accounts by the end of the year following father’s death, under which one son takes takes a lump sum or extra distributions while the other uses a lifetime stretch based on his own life expectancy.