A nonspouse inheriting a beneficial IRA
A 62 year old is the named beneficiary on her 49 year old domestic partner’s beneficial IRA that he inherited from his father. The 49 year old domestic partner passed away. What are the 62 year old’s options?
A 62 year old is the named beneficiary on her 49 year old domestic partner’s beneficial IRA that he inherited from his father. The 49 year old domestic partner passed away. What are the 62 year old’s options?
Permalink Submitted by tomd37 on Tue, 2010-12-07 21:14
I believe there is only one way to handle the matter. The 49 year old inherited a non-spousal IRA and should have been taking RMDs starting the year after the death of the original owner and based on attained age of the beneficiary as of the last day of that year. The 62 year old is the beneficiary of a non-spousal IRA and must take RMDs. However, in this case the 62 yo must continue using the same withdrawl schedule as was the 49 yo. That is to say that the new beneficiary must use the appropriate factor that the recently deceased was using and continue to reduce that factor by 1.0 each year. The new beneficiary cannot use a factor based on their attained age. Comments please from other readers.
Tom D.
Permalink Submitted by Alan Spross on Tue, 2010-12-07 23:12
Agree with Tom.
The successor beneficiary RMD requirement here is not quite so bad as the more typical case of a younger successor beneficiary, ie having to continue the prior beneficiary RMD schedule.