Inherited IRA for Non Spouse Beneficiary
Hello,
I’m hoping you are willing to clarify something for me. The fact pattern is:
Husband owned an IRA passed away 1/16/2018 at age 83;
Wife was the beneficiary and claimed it as her own naming her children as beneficiaries (it was not established as in inherited IRA);
Wife passed away 10/29/2021 at age 82;
The children of their mother’s IRA have 10 years to empty the IRA (setting aside the current proposed regs for RMDs within the 10 years).
Is my understanding correct? The beneficiary is transferring her inherited IRA and the new custodian is looking for the death certificate for her father.
Any guidance is appreciated.
Thanks!
Permalink Submitted by Alan - IRA critic on Mon, 2022-04-11 16:43
You are correct. If the children are not disabled or chronically ill, they are subject to the 10 year rule. Each of their inherited IRAs must be drained by 12/31/2031. As you indicated, under the proposed Secure Act Regs not expected to be final until late this year, they would also have to take annual life expectancy RMDs (single life table based on each’s age in 2022) in years 1-9. The separate account rules can be used by the children to affect these annual RMDs. Finally, the IRS will have to determine if a LE RMD is required for 2022 or not, and the children are jointly responsible for timely completion of the 2021 year of death RMD if mother did not complete it.
Permalink Submitted by Laura Davitt on Mon, 2022-04-11 18:02
I appreciate your input! Fortunately, the mother did satisfy her RMD in 2021 so that was not an issue. Thank you, again!