IRA BDA Question Pre/Post Secure ACT
Hello,
My client’s (Gail) father passed away in 2013 (89) and she inherited 50% of his assets from the IRA. The other 50% of the fathers’ assets were inherited by this client’s brother.
The brother’s IRA BDA was opened and held with another custodian from my firm. The brother has now passed away in 2025 and Gail opened an IRA BDA with the other custodian with the father as the Original Depositor on that IRA BDA. Will Gail need a separate IRA BDA opened here to inherit her brothers remaining portion of the funds from the brothers IRA BDA? or can she combine the assets with the IRA BDA at my firm since the original depositor is the same?
Are the RMD rules different for her current NFS BDA and the portion of funds she will be inheriting from the brother?
Thank you.
Permalink Submitted by Alan - IRA critic on Tue, 2025-05-27 14:33
Yes, the RMD rules are different and therefore these inherited IRAs cannot be combined. They will also be titled differently.
Gail can continue the lifetime stretch from her original inherited IRA. The divisors are based on her single life expectancy assuming her separate inherited IRA was established by the end of 2014 (separate account rules).
She is a successor beneficiary on the twice inherited IRA from her brother. As such, she is subject to the 10 year rule on that account and must continue the RMD schedule of brother in years 2026-2034 and drain it by the end of 2035. She must also complete brother’s 2025 year of death RMD if he did not complete it. This inherited IRA should best be titled as “Gail as beneficiary of (brother)”.
Note that even if the separate accounts were not established by the end of 2014 and the oldest of the two then determined the RMD divisors for both, the 10 year rule still applies to the twice inherited account, so they cannot be combined or aggregated.