2 Beneficiary IRA – spouse and child beneficiaries

A client dies in 2019 with 2 IRAs.

IRA #1 – beneficiary is the husband. $100k
IRA #2 – 50/50 beneficiaries include the husband and a child $100k…child’s distribution is $50k.

The child cashes out his 50% on IRA #2.

Does the child’s distribution cover the full 2019 RMD for the deceased client? or does the spouse have to take his own distribution from IRA #1? IRA #2?



If the child’s distribution was at least equal to the balance of the client’s 2019 RMD, then the year of death RMD is satisfied and the husband need not take a distribution for the 2019 RMD. If husband is over 59.5, in most cases he should transfer the balance of both IRAs into his own IRA. Interesting with all potential beneficiaries unhappy with losing the LE stretch due to the Secure Act for deaths after 2019, this child would have qualified for the stretch but instead cashed it out. Perhaps child had urgent need for funds.

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