Broker Check

Inherited IRA

To assist an IRA account holder with their estate planning, you'll want to understand how the rules regarding inheriting an IRA can impact your beneficiaries.

  • Any required minimum distribution that should have been taken by the deceased in the year of death should be taken after the IRA is transferred or distributed. The named beneficiary(ies) will receive the required distribution in the year of death.
  • The person disclaiming the IRA must receive NO benefit from the disclaimed property. However, under IRS Revenue Ruling 2005-36, a beneficiary can withdraw the owner’s required minimum distribution from an IRA account and still later disclaim the balance of the IRA, as long as the disclaimer rules are satisfied. This ruling was effective June 27, 2005.
  • Final beneficiary(ies) must be determined by September 30 of the year following the IRA account holder's year of death.
  • A certified copy of the IRA account holder's death certificate will be needed to file the death claim.
  • Required minimum distributions taken by the beneficiary must occur by December 31st of the year following the IRA account holder's year of death.
  • No distributions should be taken from the deceased person's IRA until a meeting with the client and FA is held and a plan is established to handle the assets.