Minor Beneficiary of IRA/RMD Deadline

Submitted by Michele Meyers on Fri, 2013-11-22 15:07

Minor is one of 4 IRA beneficiaries. The other 3 have claimed their shares and taken their share of the remaining amount of the deceased’s RMD for 2013. Minor has not claimed yet because fund company requires court guardianship papers to claim on her behalf. Her parents are deceased and her uncle has custody, but not legal guardianship. What will happen if she cannot claim this year, leaving part of that RMD unsatisfied? Is there some kind of exception in a case like this to avoid penalties? Thank you!



Submitted by Alan - IRA critic on Fri, 2013-11-22 16:33

  • Yes, the IRS will almost always grant a penalty waiver in situations like this. Form 5329 should be filed following the instructions on p 6 of the 5329 Inst. In addition, since all the other beneficiaries have established separate accounts, the minor is the only beneficiary left and therefore is deemed to also have a separate account. This is necessary for the minor to be able to stretch the IRA using her own life expectancy rather than that of the oldest beneficiary.
  • Note that penalty waiver may not even be necessary. The decedent’s RMD can be satisfied in any combination by the beneficiaries, so if any of them took out enough to cover the minor’s share, the minor will not have to take a 2013 RMD.

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