Beneficiary of an existing Beneficiary IRA
What choices does a spouse have when she inherits a beneficiary IRA from her husband. The original IRA was owned by father who passed away several years ago. His beneficiary was his married son. The son has now passed away and the son’s wife is his sole beneficiary. Does she take distributions on her husband’s schedule or does a new schedule start for her?
Any help would be appreciated.
Thanks.
Permalink Submitted by mk foss on Wed, 2010-12-15 18:30
The new beneficiary continues the payments that would have gone to her husband had he survived. Those payments were based on his age the year after his father died – the factor for that age would have been reduced by 1 each year to get the divisor. The spouse of the former beneficiary continues along with this same procedure – her RMD for 2010 would be the divisor for 2008 reduced by 2.
Permalink Submitted by Joseph Cosden on Fri, 2010-12-17 14:38
Thank you for that information. How would the new account be registered? We are thinking something like:
John Doe, Deceased, Robert Doe, Deceased, for benefit of Jane Doe, Beneficiary.
Do you think that that would pass muster?
Permalink Submitted by Alan Spross on Fri, 2010-12-17 16:24
There is no single acceptable format. Often, the custodian’s processing platform determines how they require the account to be registered.
Would start with this: “Jane Doe as beneficiary of Robert Doe, deceased, the beneficiary of John Doe, deceased”
IRS prefers the first named to be the current beneficiary, whose SSN is on the account, although it is not a requirement.
Permalink Submitted by Joseph Cosden on Fri, 2010-12-17 18:26
Thank you for your input.