inherited IRA
Just confirming…my client is one of three non-spouse beneficiaries. His Aunt passed away last year at age 69 and she has her IRA at Schwab. It is best to set up the IRA-BDA at Schwab and then do a trustee to trustee transfer to an IRA-BDA under my clearing firm correct?
Permalink Submitted by Alan Spross on Mon, 2011-06-20 23:54
Correct.
Most firms will probably establish separate sub accounts when they are first aware of the owner’s death. Each such account would contain the respective amount of shares of each investment, and the value of each beneficiary sub account would be the amount transferred to the BDA. The separate accounts need to be established no later than 12/31 of the year following the year of the owner’s death in order for each beneficiary to use their own life expectancy for RMDs. If this is done, then each beneficiary must satisfy their own RMD for the year, based on the appropriate share of the 12/31/2010 balance. If one of the beneficiaries wants to take a lump sum distribution, it therefore will not satisfy the 2011 RMD for the others.