Second Generation Inherited IRA’s Proper Title
I am looking for clarity around the Proper Title for Second Generation beneficiary of IRA. I noted the earlier article the referenced Form 5498 instructions, but fond nothing in the instructions which explain the Title. I did find Publication 590-B which states, page6 Beneficiary: “However, you can make a trustee-to-trustee transfer as long as the IRA into which amounts are being moved is set up and maintained in the name of the deceased IRA owner for the benefit of you as beneficiary.” In light of the changes to the RMD for inherited IRS’s is there any change in the titling? So where you have 1st decedent, and 2nd Decedent, and then transfer to Bene, the title would be: “1st Decedent IRA, F/B/O Bene, successor beneficiary to 2nd Decedent” of do we drop 1st Decedent and go with “2nd Decedent IRA, F/B/O Bene” .
Permalink Submitted by Alan - IRA critic on Fri, 2021-04-16 22:19
There is no change to titling. Each custodian has their own format, and if the IRS had an issue the custodian would have to change their format. Once a successor beneficiary inherits, the suggested format is “successor beneficiary (name) as beneficiary of original beneficiary (name)”. The IRS does not expect the several names to continue to be listed as successor beneficiaries are added. Most custodians have space limits in their processing system, but if they want to show more than the last two beneficial owners, they can.
There could be concern if a new custodian required a different format than a prior custodian and a direct transfer was impeded, but I have not heard of any such situations that could not be resolved.