Estate Receives IRA
If the owner of a beneficiary IRA dies with no named beneficiary, then the IRA goes to the estate. Doesn’t that eliminate any option for another person to continue the deceased beneficiary’s distribution schedule? Wouldn’t that require a total distribution?
Permalink Submitted by Alan - IRA critic on Thu, 2015-02-12 21:40
No, although some IRA custodians suggest that. The RMD schedule of the original beneficiary continues which means that the beneficiary of the estate of the designated beneficiary can have the IRA assigned to them and the original beneficiary’s RMD schedule continued. IRA custodians do not much like to maintain inherited IRA accounts for estates so they often try to push for a lump sum distribution. That said, if the IRA agreement specifies this requirement, it is permitted, but I doubt that many agreements state that a lump sum distribution is required in this situation.