- May 3, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Dealing with Inherited Retirement Account After Father’s Passing
My dad passed away last year at age 72, before he was required to take Required Minimum Distributions (RMD’s). As per the IRS regulations, I am mandated to deplete the inherited retirement account within a span of 10 years, which I fully comprehend.
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Moreover, considering that my dad would have turned 73 this year (2024), the question arises – do I have to initiate RMD’s as well, based on his hypothetical age? Or is it sufficient for me to adhere to the 10-year rule? Your insights on this matter would be greatly appreciated. Thank you in advance.
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****** just grabbed a
Literally, the minute he deceased you became the owner of the IRA even though it may have taken months to process the paperwork and establish the beneficiary account.
Thus, if your dad had not yet reached his Required Beginning Date (RBD) you will not be required to take an RMD during the 10-year distribution period.
Sorry for your loss. An Inherited IRA has a death distribution per IRS as you have mentioned, that’s all that matters here whether he was taking RMDs or not is irrelevant.
The rules on this are surprisingly dense and complicated – and frankly, I’m not sure anyone really understands them. My mother just inherited one and we spoke with several different people at Fidelity and got several different answers. These answers included a) no RMDs, but all money out in 10 years, b) no RMDs, but all money out after 5 years, and c) RMDs. A lot depends on your age, the age of the decedent, how close those ages are, and determinations about whether you are an “eligible” person. I believe it is also complicated by changes in the tax law of late relating to the age required to take RMDs
At least on Fidelity’s website there is a section that tells you what your RMD apparently is for a traditional IRA. That section has an amount calculated for my mother’s inherited IRA, and when I’ve used various “inherited IRA calculators” online, the amounts seem to match up. According to Fidelity they will notify you in October if you haven’t taken and RMD for the year and are supposed to. We are going to largely use that as a guideline, but try to take as much out each year as possible so as to not increase my parent’s tax bracket, just so we aren’t left with some significant required distribution in year 5 or year 10.
I don’t know why they need to make things so complicated.