Newly inherited IRA , can it be transferred to a different custodian without establishing it at the current one first?
IRA is split 50/50 between beneficiaries Both will be using the inherited IRA feature with the 10 year payout rules.
Beneficiary 1 has an account at the current custodian, so it’s simple enough to just have the new inherited IRA opened in place.
Beneficiary 2 does NOT have an account there. Is it possible to open an account elsewhere, and have their funds transferred directly to the new custodian under the new inherited titling, or do you have to open an account at the current custodian first ?
Secondary question, the 2021 RMD will have to be taken ,as it was not done yet. My understanding is that one or both beneficiaries may take the RMD in order to satisfy that , and it doesn’t have to be split 50/50. Anyone have direct experience with this ?
Permalink Submitted by Alan - IRA critic on Mon, 2021-04-19 01:55
Most custodians will require a separate account to be opened there regardless of whether the balance will be transferred elsewhere or not. Their processing systems only support one SSN per account, so the new inherited IRA accounts will show the individual beneficiary SSNs and be titled as individual inherited IRAs. These can then be easily transferred to a new custodian.
You are correct that the year of death RMD that was not completed can be completed in any combination by the beneficiaries. The IRS Reg states that it must be satisfied by “a beneficiary”, which is interpreted as meaning any beneficiary. Further, this RMD can be distributed anytime by the end of the year of death before or after an account is transferred elsewhere. Of course, the beneficiaries will have to coordinate who takes what amount.