Separate Accounts
After Dec 31st of the year following death, multiple heirs can no longer split accounts and use the exception to the rule and therefore they must take their RMDs based on the life expectancy of the oldest beneficiary.
1. However, I assume that if the plan allows, they can still split the accounts so they have autonomy of decision making as to how to invest etc, it’s just that they will still have to base RMDs on the oldest beneficiary’s life expectancy. Correct?
2. Does this rule apply to all types of accounts (ie: IRA, 403b, TSP, 457, 401k?)
Thanks in advance,
Lee
Permalink Submitted by Alan Spross on Wed, 2011-10-05 21:29
1) Correct. The oldest beneficiary that did not either disclaim by 9/30 of the year following death or fully distributed their share by that date.
2) Yes, except that certain employer plans may have different methods of splitting the accounts such as sub accounts in the same basic plan. With an IRA, each beneficiary would be allowed to create a separate inherited IRA account #. Each beneficiary needs to name their own successor beneficiary as well for their share of the inherited account.