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Old 11-17-2013, 08:02 AM
 
118 posts, read 97,182 times
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Parent died in June 2013 at age 93. They had an inherited IRA (so minimum distributions are larger than if it was their own IRA, right?) of about $200K. They hadn't taken the minimum distribution for 2013.

They named grandchild as beneficiary of the IRA.

They named their child (parent of grandchild) as, after some other payments, the inheritor of the balance of their estate.

From what I am reading, there has to be (at least) the minimum distribution for 2013 based on the decedent's age (and again, they didn't take the distribution while alive). Who gets that distribution? The child who is recipient of the remainder of the estate or the grandchild who is beneficiary of the IRA?

I could see arguments both ways - the grandkid got the IRA upon death and so the minimum taken out after death goes to them.
Or
The minimum distribution is based on the decendent's age / they should have taken the money while alive but didn't. If they did take it out, it would be part of the estate. Should it matter where it goes if we are taking it out now on their behalf (in other words, it would go to the estate).

Thank you!
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Old 11-17-2013, 09:53 AM
 
Location: N/A
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Quote:
Originally Posted by InvestorWithQuestions View Post
Parent died in June 2013 at age 93. They had an inherited IRA (so minimum distributions are larger than if it was their own IRA, right?) of about $200K. They hadn't taken the minimum distribution for 2013.

They named grandchild as beneficiary of the IRA.

They named their child (parent of grandchild) as, after some other payments, the inheritor of the balance of their estate.

From what I am reading, there has to be (at least) the minimum distribution for 2013 based on the decedent's age (and again, they didn't take the distribution while alive). Who gets that distribution? The child who is recipient of the remainder of the estate or the grandchild who is beneficiary of the IRA?

I could see arguments both ways - the grandkid got the IRA upon death and so the minimum taken out after death goes to them.
Or
The minimum distribution is based on the decendent's age / they should have taken the money while alive but didn't. If they did take it out, it would be part of the estate. Should it matter where it goes if we are taking it out now on their behalf (in other words, it would go to the estate).

Thank you!
The Required Minimum Distribution (RMD) goes to the beneficiary...for 2013 the RMD is based on the decedent's age, for 2014 and up it's based on the beneficiary's age.
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Old 12-01-2013, 03:44 PM
 
118 posts, read 97,182 times
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thanks for the info. Just curiosity - the money goes to the beneficiar(ies) because the RMD wasn't made before death? If the RMD was made before death, does the money still go to the beneficiar(ies)? or does it become part of the estate?
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Old 12-01-2013, 04:08 PM
 
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Originally Posted by InvestorWithQuestions View Post
thanks for the info. Just curiosity - the money goes to the beneficiar(ies) because the RMD wasn't made before death? If the RMD was made before death, does the money still go to the beneficiar(ies)? or does it become part of the estate?
if it was made before the death, then it would be part of the estate (if he did not spend it all), because it was not made then it passes by contract of law to the beneficiary...it would not be considered IRD (income in respect of a decedent) and not included on the decedent's final tax return.
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Old 12-01-2013, 10:37 PM
 
118 posts, read 97,182 times
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Thank you!
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