Estate as IRA beneficiary
T-IRAowner, 80, died in 2021 naming her estate as beneficiary. Beneficiary, adult daughter, is aware of her options el- lump sum distribution or stretch using the deceased remaining life expectancy.
Question. Assuming she stretches using the single life expectancy of the deceased does the estate need to remain open? If so are there any other options to close the estate down so she doesn’t Have to file an estate tax return
Thank you
Permalink Submitted by Alan - IRA critic on Mon, 2021-08-23 17:51
The executor can assign the inherited IRA out of the estate to the estate beneficiary before taking any distributions and avoid the 1041. Then the beneficiary can complete the annual RMDs based on the age of decedent in the year of death. The beneficiary is also responsible for taking the decedent’s 2021 RMD if the decedent did not complete it. Every so often the IRA custodian will resist assignment, but they know full well that the IRS has approved the practice repeatedly.
In addition to the lump sum and annual RMDs, the beneficiary can also distribute amounts in excess of the annual RMD whenever they wish.