INHERITING AN INHERITED IRA
If a parent deceased, say in 2014, a son and daughter both opted for the inherited IRA and made the appropriate transactions to move the funds to reflect such, and then say in 2016 the son died leaving his “inherited IRA from the parent to his sister, what are her options? Can she claim and continue the inherited ira from her brother as if it was originally her own? or is she required to claim it immediately, etc etc?
What are her options here?
Permalink Submitted by Alan - IRA critic on Tue, 2017-06-20 19:54
She should have the inherited IRA re titled showing her name as beneficiary of brother. Parent’s name can be dropped unless the custodian wants to include all 3 names. She names her own succcessor beneficiary on the account. Her RMDs must continue her brother’s RMD schedule, using the divisors he would have used reduced by 1.0 for each year. She is also responsible for completing brother’s 2016 RMD if he did not complete it before passing. She should address these requirements ASAP since it has been several months since her brother passed and further delay could lead to potential problems. She CANNOT combine this inherited IRA with her own inherited IRA because they have different RMD divisors. She must take out the correct annual RMD from each account.