Inherited IRA Question
The owner of a 403b plan passed away in 2008 at the age of 62. Her mother was the named beneficiary (age 93) of the 403b, but did not know about the 403b plan and never had the 403b rolled over into an inherited IRA. The mother passed away in 2009. The son is the executor of his mother’s estate and just found out about the 403b. He was told to file an estate claim form for the 403b so it would be included his mother’s estate because she did not have a named beneficiary. So currently the 403b is in estate of the mother as of 10/2015 and there has never been any RMD’s taken from the 403b plan.
The son is the sole heir to his mother estate and wants to know his options for the 403b plan.
Thanks.
Permalink Submitted by Alan - IRA critic on Fri, 2015-12-18 19:04
If mother had elected life expectancy by the end of 2009, it would still have not provided a longer stretch than the 5 year rule due to her age. Since 2009 did not count due to the RMD waiver provisions, this plan should have been fully distributed by the end of 2014. Her estate is subject to the same requirements, so the son should simply request a lump sum distribution of the 403b plan to the estate. He can pass the taxes due on this distribution through to the estate beneficiaries on a K 1. It is unlikely that the IRS will even contact the estate regarding a penalty for failure to distribute the plan by the end of 2014, but the son may want to file a 2014 5329 under the estate EIN requesting a waiver for reasonable cause (mother in 90s who died before filing beneficiary papers to the plan). That should eliminate any penalties for delinquent RMDs, but son should request the lump sum distribution ASAP.