Inherited IRAs – commingling qualified and non-qualified monies
We have a situation where a marital trust was the beneficiary of a traditional 401k plan that has a Roth portion. As a result, we have had to set up both a Marital Trust Inherited Traditional IRA and a Marital Trust Inherited Roth IRA.
We also have Traditional and Roth IRAs where the marital trust is the beneficiary. Is it possible to have the qualified plan (401k) moneys commingled with the IRA moneys in the respective Inherited Traditional and Roth IRAs?
Permalink Submitted by Alan - IRA critic on Tue, 2017-10-03 23:57
The inherited IRAs can be combined with the inherited 401k accounts only if the accounts were both inherited from the same decedent AND the RMD divisors are the same. The divisors could differ if there were any additional beneficiaries named or if the inherited IRAs were not established by the end of the year following the year of death. In addition, the Roth portions should not be combined if either of the Roth accounts have not been held at least 5 years from the year the decedent first contributed. While there is no specific IRS guidance on what would happen if inherited accounts with different RMD divisors were combined, at best the higher RMD (lower divisor) would apply to the entire balance.
Permalink Submitted by David Mertz on Wed, 2017-10-04 02:51
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