RMD – Multiple IRA Bene’s
When four siblings receive IRA proceeds from a parent to their own proper titled Bene IRA, RMD for all four will be based on the oldest siblings age. Is this correct?
Your thoughts would be appreciated.
Regards,
K
When four siblings receive IRA proceeds from a parent to their own proper titled Bene IRA, RMD for all four will be based on the oldest siblings age. Is this correct?
Your thoughts would be appreciated.
Regards,
K
Permalink Submitted by mk foss on Fri, 2011-01-28 19:07
Each individual should be able to use their own life expectancy in the circumstances that you describe. When the beneficiary is a trust for 4 children or when there is one trust at the date of death that later splits into four tursts – you must use the life expectancy of the oldest.
Permalink Submitted by Alan Spross on Sat, 2011-01-29 00:48
Note that the separate accounts need to be created no later than 12/31 of the year following the year of death for each beneficiary to use their own life expectancy.
If the deadline is missed, then the age of the oldest applies to all form then on even if the separate accounts are created later.
Some parents create a separate IRA for each child if they worry about the timely separation of beneficiary accounts, but this adds alot of extra responsibility to the parent and I don’t recommend it unless absolutely necessary.