Bene IRA RMD
My mother passed away in 2016 and was receiving RMD’s. Her 2016 RMD was satisfied before her IRA was split into Bene IRA’s. The primary beneficiary of her IRA was her Trust which I’m the trustee of. Her trust had the proper language and was Qualified which allowed 3 Bene IRA’s to be opened in the 3 bene names vs. the Trust. I believe for 2017 and proceeding years the oldest beneficiary’s DOB is to be used by all of us for calculating future RMD’s going forward. My question is what factor do we start with in 2017? The age of the oldest bene (56 years old at end of 2017) in 2017 or 2016 factor(age 55) and subtract 1. My CPA’s response was “Great Question” but provided no answer. I think it would be the oldest beneficiary’s age at year-end following year of owner’s death which would be age 56 which is a factor of 28.7. Maybe this slight difference would never be known by IRS but want to follow the law. Any input or confirmation would be appreciated.
Permalink Submitted by Alan - IRA critic on Sat, 2017-02-25 20:02
You are correct. 28.7 divisor for 2017 beneficiary RMDs for each beneficiary, 27.7 for 2018 etc. This is the same divisor that would have applied had there been no trust and each beneficiary had been named individually, but separate inherited IRAs were not established by the deadline 12/31/2017. The separate account rules do not apply to trust beneficiaries even after the trustee is able to distribute the inherited IRA out of the trust to the trust beneficiaries.