RMD from brokerage and annuity IRA’s
John died on August 29, 2016. He had three IRAs – one in a brokerage account and two annuities. He did not take any RMDs in 2016.
His children, Tom and Lisa are equal beneficiaries of the three IRAs.
Can each child set up one beneficiary IRA and transfer their shares of each of John’s IRA to this beneficiary IRA? (The annuities would be converted to cash.)
If the answer is yes, can each child take their portion (one-half) of John’s RMD from this account?
If the answer is no and they must set up separate beneficiary IRAs for each of John’s IRAs, can they take their share of the required RMD from one of the accounts?
Gerry Stellwagen
Permalink Submitted by Alan - IRA critic on Tue, 2016-09-27 17:02
Yes, each child can directly transfer their share of the 3 accounts into a single beneficiary IRA. With respect to the 2016 year of death RMD that John did not complete, the beneficiaries can distribute that amount in any combination between them. They need to coordinate to make sure the full amount is distributed. In most cases however, each taking 50% of John’s RMD would be the most simple. but sometimes one beneficiary needs the extra money and the other would prefer to stretch their share longer. If for some reason the accounts are not combined, because they were inherited from the same decedent, the RMDs could be aggregated, meaning that it could be taken in any combination from the multiple accounts remaining. The deadline for establishing separate inherited IRA accounts so that each child can use their own life expectancy for their beneficiary RMDs starting in 2017 is 12/31/2017.