Beneficiary IRA
Grandfather had a 401(k). Granddaughter is the beneficiary of the 401(k).
Grandfather passed away. The 401(k) is with Merrill Lynch and the statement is showing the beneficiary (the granddaughter) named on the plan. It looks as if she owns the account now.
I thought the original 401(k) had to become a beneficiary IRA first? Am I incorrect?
Permalink Submitted by Alan - IRA critic on Mon, 2020-03-16 22:35
That’s just sloppy statement titling, but it does indicate that the grand daughter is being treated as the beneficiary. She can do a direct rollover to an inherited IRA (or inherited Roth IRA) if she wishes, and take beneficiary RMDs from the inherited IRA. The RMDs are affected by the age of GF at death, if he was retired, and the date of death (prior to 1/1/2020 under old rules, and after 2019 new Secure Act rules).