Inherited IRA .. Need Someone Who Has Done This Before

GH1 | May 12, 2022 | 1,054 posts since 2017

My mom passed left me a ira which she was drawing RMDs on. Now no one at the bank will actually tell me the best way to handle it. No one at the branch clearly seems to know. I do not want penalties and also do not need the money at this time. So anyone who has done this please help. Its at BOA they said go ask someone else . They will do what i tell them. Can it be re-evaluted when i open a new account and push the RMDS back till i want to take at 70. Or do i have to transfer and continue taking the rest of RMDS on her schedule.? Any help would be appreciated. Also if she has not taken the RMD for this year do i need to take them at transfer ?

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Answers

milty | May 13, 2022 | 1,676 posts since 2018

"Or do i have to transfer and continue taking the rest of RMDS on her schedule?"

My understanding is you have to continue taking the RMDs, that is, they are based on your Mom's schedule and not yours.

Choice | May 12, 2022 | 937 posts since 2020

Take a look at https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary

enduser | May 12, 2022 | 711 posts since 2015

"there are distinct differences in the rules for withdrawing money, depending on whether you're the deceased owner's spouse or you're a non-spousal beneficiary of the IRA."
https://www.investopedia.com/inheriting-roth-ira-from-parent-5220471

The Rules on RMDs for Inherited IRA Beneficiaries [Updated March 19, 2022]
https://www.investopedia.com/articles/personal-finance/102815/rules-rmds-ira-beneficiaries.asp

Inherited IRA: How It Works & Distribution Rules
https://www.nerdwallet.com/article/investing/inherited-ira-option

Schwab inherited IRA withdrawal rules
https://www.schwab.com/ira/inherited-ira/withdrawal-rules

RickZ | May 12, 2022 | 218 posts since 2010

When my Mom passed I transferred my Inherited IRA from Morgan Stanley to Ally. I've been pleased with the IRA Dept. at Ally so if you're not happy with the people at BoA I'd consider a trustee-to-trustee transfer to another institution. The transferee institution can help you with the paperwork. However, since your Mom's estate is required to take her distribution in 2022, I think it would cleaner if the estate first took the 2022 RMD at BoA before you do a transfer.

GH1 | May 12, 2022 | 1,054 posts since 2017

Thanks to all for the information

MY2CENTSWORTH | May 13, 2022 | 436 posts since 2016

garyh1961, I'm sorry to hear about your mom, but what you have is fairly complicated if you aren't aware of what options you have to get it accomplished properly. I didn't read the suggested links from the other DA replies, but there are some great websites that cover your situation very well. You didn't mention when your mom passed away, and while I'm not certain, some inherited IRA rules may have changed since my brothers passing 5 years ago. You did say she was taking a RMD so I would assume it was a Traditional IRA, but there can be different rules for inheriting various retirement plans. I went through this after my brother passed away in 2017 and I found that many of the bank people don't know what they are doing. Luckily I had done some careful research and actually knew more about it than a few of the "IRA" specialists at the local banks. I do have some websites bookmarked and could PM you the links or write again in the next couple of days or if you possibly have some specific questions I would be happy to pass along what I know from my experience. One good one that I used that gets into specifics to keep you in compliance with Uncle Sam is https://www.irs.gov/publications/p590b#en_US_2018_publink1000230756Maybe there is a newer link, but this is one place I researched. I would caution you not to do anything if you aren't sure it's correct, because there are no do-overs if you happen to have it done incorrectly. Good luck!

GH1 | May 13, 2022 | 1,054 posts since 2017

Yes please me me the links thank you

Ratesaver | May 15, 2022 | 187 posts since 2013

others have giving you info and sites however remember if you cash out the IRA you need to pay the tax so be careful.. I don't suggest cashing it however if you don't have to Good luck. Sorry about your mom

GH1 | May 15, 2022 | 1,054 posts since 2017

Thank you. Since she has already started taking RMDs. It seems as though i must roll over to me and take this years RMD and then continue the schedule of withdrawels. Then i will just pay ordinary income on the withdrawals till its exhausted. Which is fine keeps my income little lower over the years. Its better if your the spouse as can clam as your own. Inherited to children creates a different bracket. And as MY2CENTSWORTH explained. You have 1 shot to do it right. IRS does not care and will make you pay the penalties if done wrong. They dont care if the bank guides you wrong.

Thanks to all for your help !!!!!!!!!

Ally6770 | May 15, 2022 | 4,294 posts since 2010

Please read how the Inherited IRA must be titled. Also do not ever take possession of the check or have it made out in your name etc if you change institutions.
It must be titled as " Inherited IRA (from name of deceased, date of death) for the benefit of (your name). Please read all gov and or IRS recent information on inherited IRA's. ABSOLUTELY NO DO OVERS EVEN IF THE INSTITUTION MAKES A MISTAKE. If you touch the check etc it is yours and you pay 100% of the income taxes on the whole balance. NO RMD's will able to be done.

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