Combining IRA BDA’s
I have a non-spousal beneficiary who has two separate IRA BDA accounts from the same decedent. May I combine the accounts?
I have a non-spousal beneficiary who has two separate IRA BDA accounts from the same decedent. May I combine the accounts?
Permalink Submitted by Alan Spross on Thu, 2010-11-04 20:55
Yes, they can be combined.
But one unlikely exception to combination does apply. If the RMD divisors are different for the two accounts, then they should NOT be combined. Circumstances that would make the divisors different include:
1) Separate accounts were not created by the deadline for one of them, but they were for the other or the other may have had only one beneficiary.
2) One of them was an employer account transfer to an inherited IRA, but not done by the deadline and it triggered any restrictive conditions in the employer account to apply to the inherited IRA.
Again, these are unlikely, but certainly not impossible conditions. If the divisors were different and the accounts combined, the larger RMD of the two would apply to the entire account.
Permalink Submitted by [email protected] on Thu, 2010-11-04 22:29
they were from two different employer plans-we were told by our BD that they needed to be separated. Could the pension lump sum & the 401k have gone into the same account in the first place?
Permalink Submitted by Alan Spross on Fri, 2010-11-05 02:19
Hard to say whether the BD was referring to their own processing platform or the RMD rules that I cited earlier.
Did the qualified plan owner pass prior to the required beginning date?
What was the date of death and the date of the respective transfers to an inherited IRA? Same employer or different employers?
Permalink Submitted by [email protected] on Fri, 2010-11-05 17:58
Did the qualified plan owner pass prior to the required beginning date? Yes
What was the date of death and the date of the respective transfers to an inherited IRA? date of death: 2/16/2010; Pension transferred: 6/8/2010, 401k Trans: 8/12/2010
Same employer or different employers? Same Employer
Permalink Submitted by Alan Spross on Fri, 2010-11-05 20:09
Under these circumstances there is no reason not to combine the accounts. I would press the BD for an explanation why they feel the accounts should be kept separate.