Non-Spousal Inherited IRA Split

A client with a non-spousal inherited IRA in 2014. RMD’s are not needed. Was invested in an Allianz EIA. Returns have been sub-par. First Question; can the IRA be split in two? One IRA will provide the required RMD’s and the other will be invested for growth. Second Question; if this is possible, will it change the old non-spousal inherited IRA “stretch” rules to the new rules?



Yes, a non spouse inherited IRA can be split with any portion transferred via direct transfer to a new inherited IRA. The RMDs can then be aggregated between the two. This will not change the life expectancy RMD calculation when RMDs resume. Those EIAs were hedged by purchasing down side protection, so their returns would always trail the markets in good times. But in a bear market they shouldn’t be dropping much. In other words, now is whne that downside protection should pay off.

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