Can remainder of RMD not taken by deceased mother be disclaimed?
Hello, I have 3 questions:
1) My client, the Mother, 89 years old, died in 2024 and did not take all of her IRA RMD IN 2024. The beneficiaries are her 3 children equally. Can my client Child/Son #1, who is 64 years old, disclaim his one-third of what the Mother did not take in 2024?
2) If he can disclaim it, can he designate it to go to only one of his two siblings?
3) If he can disclaim it, can Child #1 still be entitled to his remaining share of the IRA as a inherited IRA which will be subject to the beneficiary IRA RMD rules beginning in 2025, to be emptied by 2034?
Thank you.
Permalink Submitted by Alan - IRA critic on Mon, 2024-09-09 17:34
The son can certainly disclaim, but the IRA beneficiary clause must be checked, even though the typical provision would result in the disclaimant’s share being split between the remaining two primary beneficiaries.
No, he cannot designate the recipient.
Disclaimant will have to establish a beneficiary IRA before disclaiming all or part of that account. When the others receive their portion after the IRA custodian accepts the qualified disclaimer paperwork, the others will be subject to the same RMD requirements, but their account will be worth 50% more. They will be subject to the 10 year rule, with annual beneficiary RMDs based on their single life expectancies for their ages in 2025.
The year of death 2024 RMD not taken by mother becomes the responsibility of the remaining beneficiaries, who can split it in any combination they wish. The deadline to complete the year of death RMD is 12/31/2025, but it should ordinarily be taken sooner. Per IRS RR 2005-36, if the disclaimant received the year of death RMD before disclaiming, this would not disqualify the disclaimer, but of course any other distributions would constitute acceptance of the account and a later disclaimer would be invalid.