IRA Transfer

Submitted by Robert Carnevale on Tue, 2017-06-06 17:02

My father held an IRA and listed my mother as the beneficiary. My father died, and 4 months later my mother died. She did not take any action on the IRA. I am the successor trustee and executor. My sisters have already taken their distributions from the IRA by check. I know, I know, they didn’t care. I want to take the remaining amount as an inherited IRA. The custodian says my mothers estate controls the IRA, and since I am the executor, I can control the account. I am a beneficiary of the trust and the pour-over will states all tangible personal property and remaining residual estate are transferred to the trustee of the Trust. I just want a tax free transfer if possible. How can this happen?

Thanks, BC



Submitted by Alan - IRA critic on Tue, 2017-06-06 17:23

Submitted by Robert Carnevale on Tue, 2017-06-06 17:33

Yes the trust allows me to make transfers, payments, loans, etc. I have already received RMDs over the last two years.

Submitted by Alan - IRA critic on Tue, 2017-06-06 17:42

Distributions have been made to the trust in the past and apparently passed through the trust to you personally. I take it you now want to transfer the IRA out of the trust and have it retitled showing you personally as the beneficiary under your SSN. If so, the prior link should help with that. Most larger IRA custodians today should not have a problem with that. You will have to name your own successor beneficiary on the inherited IRA. This will not change the RMD calculation.

Submitted by Robert Carnevale on Tue, 2017-06-06 18:25

Distribution has not been made to the trust. The custodian distributed 2/3rds to the other beneficaries but is insisting that the estate is the owner and I can only act as the executor. I believe the trust is the true owner, and I am a beneficiary. I will try the link above to see if that sheds any light.

Submitted by Alan - IRA critic on Tue, 2017-06-06 18:42

Mother’s estate became the owner upon her death per the IRA default beneficiary provisions because she did not name a beneficiary. You indicated that her pour over will for which you are the executor would pass the IRA into the trust. The pour over will is probably subject to probate before you can transfer the IRA into the trust. If this has not been completed, the IRA custodian would make any distributions to her estate which is still the beneficiary according to their records. I am not an estate lawyer so do not know if as both executor and trustee you could bypass the trust and have the IRA transferred directly to yourself and save a step. You indicated that you have received RMDs for two years. Were those RMDs not made payable to you as executor? What is the tax ID showing on the 1099R to report the RMD distributions.  Also, note that the estate is responsible for completing your father’s year of death RMD if he did not complete that before passing as I assume he passed after his RMDs had begun.

Submitted by Robert Carnevale on Wed, 2017-06-07 01:36

I am the executor with letter of testimontary from the probate court with this account listed on the inventory. I am also the successor trustee of the trust. Both wills state all tangible property, real estate and residual estate not already part of the trust, are transferred to the trust under control of the trustee. The RMD’s were paid under my fathers name and SSN, which I deposited into the trust account. I used the form from the above link today, and the custodian stated I was bypassing the estate, and wanted to know if I had sought advice from a lawyer. 

Submitted by Alan - IRA critic on Wed, 2017-06-07 03:42

Good idea to check with an estate attorney. You do not want to make errors that will be difficult to unravel. The custodian is only able to make distributions to the beneficiary or entity that they have retitled the IRA to. How is the IRA titled now?  Further, any distributions made after the death of the IRA owner can only be made to the current beneficiary, and must be reported under the tax ID for the payee. The IRA custodian should know that and if they were aware of the death of your father (or mother) they can no longer make distributions to the SSN of your father or mother as the case may be.. DId they know your father was deceased when they made these distributions? Even the year of death RMD for your father if he did not complete his RMD must be made to the beneficiary of record, not to the decedent.

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