CLOSING AN IRA UPON DEATH OF ACCOUNT OWNER
Researching another question, I thought I saw something in the Code that says that upon death the IRA account must be closed by the end of the year following the year of death. Of course, now I can’t find anything like that.
When an IRA owner dies, can you simply rename the account to an Inherited account or must a new inherited account be opened?
Thank you for your help.
Permalink Submitted by Alan - IRA critic on Tue, 2021-12-21 18:10
There is no such requirement. But the RMD requirements continue whether the beneficiary has reported the death or not, and mail may continue to be sent to the decedent. Eventually, the account could be escheated to the state. The beneficiary should submit the death certificate and contact info to have the account retitled as inherited within a reasonable time. Almost all custodians will then transfer the balance to a new inherited IRA. Their systems are set up not to have multiple SSNs on a single account. A beneficiary is also responsible for completing the year of death RMD if the decedent had an RMD that was not completed.