Co-mingling Inherited IRAs
I have a client who is inheriting two IRAs. One is a traditional IRA, titled in Owner M’s name. The second is already an Inherited IRA; original owner passed in 2021, account is titled “Owner A decd FBO Owner M.” Now Owner C is inheriting both, and both these accounts will move into accounts titled “Owner M decd FBO Owner C.”
I am receiving information that I can “co-mingle” both of these accounts into one Inherited IRA, as both will now have identical titles.
I believe that unless both IRAs had the same ORIGINAL owner, they cannot be co-mingled.
Can you please advise? Thank you! Holly
Permalink Submitted by Alan - IRA critic on Fri, 2025-01-17 16:30
You are correct, and even some inherited IRAs from the same original owner, but with different RMD divisors cannot be combined.
In this situation, the successor beneficiary IRA RMD schedule must be a continuation of that of the first beneficiary on that account, whereas the beneficiary of the owned IRA can use their own LE for that account.
The IRS has never indicated what happens if two beneficiary accounts are improperly combined, but the best guess is that the RMD would have to be based on the shorter of the two RMD periods.