Inheriting an inherited IRA
My mother in law inherited an IRA from her son when he died in 2019 so she was eligible to stretch it over her lifetime–however her lifetime per the table was only 5.9 years as she was 88 years old. She died this year at age 93 and she never took any distributions from the IRA. My wife inherited half of her mother’s IRA. My question: since my mother-in-law’s IRA was a stretch IRA, does the stretch provision carry over to my wife? Is my wife obligated to take RMDs starting next year or can she/we take whatever we want or nothing from the IRA until the 10th year? My guess/assumption is that regardless of the stretch classification of her mother’s inherited IRA, that the stretch provision does not carry over to my wife. Any help would be appreciated.
Permalink Submitted by Alan - IRA critic on Mon, 2024-09-09 15:49
As a successor beneficiary, the RMD schedule for the deceased beneficiary must be continued, and that will require that the inherited IRA be drained in 2025. Your wife is also responsible for completing her mother’s year of death RMD for 2024, but not for her missed RMDs prior to 2024. To be clear, your wife’s age is immaterial since she is a successor beneficiary.
The above assumes that son passed prior to his RBD, which would have been 4/1 of the year after the year he reached 70.5. However, if MIL was young enough when he was born, he might have passed after his RBD, which would have resulted in MIL’s ability to use son’s younger age for her RMDs. Probably unlikely but thought that this possibility should be disclosed.