Beneficiary IRA Transferred to Traditional IRA
A client inherited an IRA from her mother several years ago and has been taking annual RMD’s ever since. In 2020, the client transferred the inherited IRA to another institution and it was inadvertently transferred as a Traditional IRA in her name. What are the implications if nothing is done? What are the steps to correct this back to an inherited IRA? Thank you.
Permalink Submitted by Alan - IRA critic on Fri, 2021-02-05 19:51
If the TIRA has no assets in it other than the inherited IRA transfer, it can be correctly retitled by the custodian as an inherited IRA. The challenge is finding a staffer who knows this can be done and will do it. Client may have to provide some documentation such as a copy of the last inherited IRA statement, or perhaps the new custodian can clearly see that an error was made. If they won’t retitle this account it’s a real problem.