quote:
I think everyone is forgetting that the OP is a successor beneficiary, not a primary beneficiary. Grandma died, mom inherited it. Then mom died. That makes OP a successor beneficiary with respect to Grandma's IRA. Importantly, both of those deaths happeend pre-SECURE Act. As such... OP has to step into mom's shoes. This means that OP needs to take distributions from the IRA based on MOM's life expectancy, using the "minus-1" method mom would have or should have established when she inherited the IRA from grandma (so using mom's age factor as of mom's age in 2017, year after grandma died, then minus-1 each year thereafter). As far as the 5 year rule... OP has to step into the shoes of MOM's 5 year rule... which would normally have expired Dec 31, 2021 (5 full tax years after grandma's death). Because of COVID, 2020 doesn't count, so in effect, the 5 year period ended Dec 31, 2022. In effect, the 5 year period option is no longer available to the OP

Great point - 5y rule would be based on grandma so we’re back to missed RMDs.

I didn’t get the impression that there was any commingled IRA funds with Mom’s IRA. That’s hard to do with a competent custodian.

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Posted by LSUFanHouston

NOLA

Member since Jul 2009

37303 posts

Posted on 2/2/24 at 10:05 am to slackster

quote:
I didn’t get the impression that there was any commingled IRA funds with Mom’s IRA

Agreed. But I always like to point that out because...

quote:
That’s hard to do with a competent custodian

You would think. But I've seen it several times. And every time, the custodian says, "oh, we didn't know".

Usually it's a name issue. For example, Slackster Sr dies, leaves IRA to Slackster Jr. When Slackster Jr dies, he leaves his IRA, and the remaining balance of Slackster Sr IRA, to Slackster III.

Slackster III doesn't understand and just tells hiw own custodian, which is not the same as the other two, hey, I need to roll these two IRAs into one for simplicity, and custodian doesn't pay attention to name differences (and sometimes... the registration doesn't even indciate Sr or Jr)

The far worse issue I've only seen once was that the successor beneficiary tried to do a 60 day rollover out of both inherited accounts into their own IRA, and because it was just a check, the custodian didn't pay attention to the source.

Oh, you can't do a 60 day rollover on an inherited IRA, so that's a taxable distribution. Fun times...

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