calculating RMDs for multiple inherited IRAs

Submitted by robert axelrod on Mon, 2018-05-28 06:24

I inherited 4 IRAs from my parents, both already taking RMDs when they died in 2017.

Dad IRA #1
Dad IRA #2
Dad Roth IRA #1
Mom IRA #1

1. Do I use Pub 590B Appendix B Table 1 to look up my divisor based on my birthday in 2018, and apply this to each IRA?

2. Do I then subtract 1 from the divisor used for 2018 in each subsequent year?

3. Can I not combine the RMD from any of the above accounts, ie, I must take the correct RMD from each of the four accounts? Or can I take one RMD from one of Dad’s IRAs as long as it is large enough to meet the RMD requirements of Dad’s IRA #1 and #2 combined?



Submitted by Alan - IRA critic on Mon, 2018-05-28 15:43

  • In order to determine your RMD, please provide the following info. Were you the original beneficiary on all of these accounts, or were one or more previously inherited from other parent or any other person, making you a successor beneficiary?  If previously inherited from spouse, then will need DOB and DOD of both parents to determine if either parent had to take a beneficiary RMD or if they might have defaulted to ownership. All of these possibilities have a major effect on your RMD.
  • If you inherited directly from owner, the Q1 answer is Yes but you also need to complete parent’s 2017 RMD if parent did not complete it.  Q 2 would also be Yes. Q 3 is related to the needed additional info. You can combine the RMDs only if inherited directly from the same original deceased owner.

Submitted by robert axelrod on Mon, 2018-05-28 23:52

  • I was the original beneficiary on all accounts.
  • I already did 2017 RMDs for each account.
  • It sounds like I could combine the RMDs for each of Dad’s 2 traditional IRAs, but otherwise not combine.

Submitted by Alan - IRA critic on Tue, 2018-05-29 16:14

Yes, that is correct. There would not have been a 2017 RMD for the Roth account. For accounts 1 and 2 you can aggregate the RMDs and/or you could also combine those two inherited IRAs into a single account.

Submitted by robert axelrod on Mon, 2018-06-04 21:15

Given the above facts, and assuming my beneficiaries (children) are still minors, what is the most optimal way to make them beneficiaries?Can I name a trust, of which I am the current beneficiary and my children are the contingent beneficiaries? Will that allow them to continue to stretch these IRAs? Do they get the stretch over the remainder of my lifetime, over their lifetimes, over a five year period, or over something else entirely?

Submitted by Alan - IRA critic on Mon, 2018-06-04 23:14

When you name your own beneficiary, that beneficiary will be a successor beneficiary and must continue your RMD schedule. Therefore, their divisors will be 1.0 less each year just like yours would be if you lived. You could make a child’s trust your beneficiary, but for minors the most common solution is to name an UGMA account for each child as the beneficiary should they inherit while minors. If you just name them individually, the IRA agreement will probably require an UTMA account with appropriate custodian to be set up to retitle the inherited IRA. None of this will affect the RMD divisors.

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