Multiple beneficiaries of inherited IRA–how is RMD calculated?

Submitted by Barbara Kong on Sun, 2014-11-02 22:36

Our client had 9 beneficiaries of her IRA. She passed away last year at age 84 and each beneficiary established their own IRA.
We have received conflicting advice in calculating the RMD for each beneficiary’s account.
Do we need to use the eldest beneficiary’s age or does each beneficiary get to use their own age in calculating the RMD?
thanks!



Submitted by Alan - IRA critic on Mon, 2014-11-03 02:42

  1. Since each of the beneficiaries were individually named on the IRA and separate accounts were established before the end of 2014, each beneficiary can use their own single life expectancy to determine their RMDs. This assumes the IRA they inherited was owned by the client and not maintained with the client as the beneficiary. They will use Table I and the age they will be as of 12/31/2014 for their 2014 RMD. For 2015 and each year thereafter, they will reduce their original divisor by 1.0. Beneficiaries were also supposed to complete the client’s 2013 RMD by the end of 2013 if client passed before completing it. Did they do that?
  2. Note that if any of these beneficiaries are OLDER than the client, those beneficiaries can use the client’s remaining life expectancy instead of their own. That will reduce their RMDs.

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