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Old 08-17-2017, 07:01 PM
 
Location: Tennessee at last!
1,886 posts, read 2,049,283 times
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Quote:
Originally Posted by selhars View Post
So, for an inherited IRA, the brokerage can't just write checks to the named beneficiaries, withhold the taxes, and let this be simple??

Also did the OP confirm that there are SIX beneficiaries actually on the IRA? (Or six heirs, and no IRA beneficiaries).

I thought those named on the IRA just get the money.....and it can be a more direct process, like life insurance. Not the same kind of vehicle but I thought the IRA process could be simple: Beneficiary gets the money, after taxes withheld. Done. Appropriate forms filed at tax time later, of course. But I thought getting the money was simpler.
When I did this with my parents IRAs, I was required to have each of the IRA beneficiaries set up an inherited IRA account with them. Then after the money was transferred to an inherited IRA account we could keep the account or liquidate it individually. BUT we had to transfer the money to individual inherited IRA accounts for the first step.

It was not hard, but it is a process. My hard part was wrangling the four cats (relatives) into the office to get their accounts set up.
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Old 08-17-2017, 07:42 PM
 
Location: Florida
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You have gotten the correct answer. Once the accounts are set up the beneficiaries can take all of the money out or take RMD's. What they take out will be taxable income to them.
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Old 08-17-2017, 09:02 PM
 
Location: Central Connecticut
420 posts, read 266,632 times
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Quote:
Originally Posted by lae60 View Post
When I did this with my parents IRAs, I was required to have each of the IRA beneficiaries set up an inherited IRA account with them. Then after the money was transferred to an inherited IRA account we could keep the account or liquidate it individually. BUT we had to transfer the money to individual inherited IRA accounts for the first step.

It was not hard, but it is a process. My hard part was wrangling the four cats (relatives) into the office to get their accounts set up.
Yikes! That won't be easy for me after my father passes away. My four siblings know nothing about financial instruments, and three of the four live out of state. I guess I'll cross that bridge when I get to it.
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Old 08-17-2017, 11:20 PM
 
Location: Tennessee at last!
1,886 posts, read 2,049,283 times
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Loriact

They can set up the accounts without going to the brokerage. Some of my parents beneficiary did it through phone consultations and mailing the paperwork to them. And three of the four were clueless and had to be walked through the process...with the threat that if they did not do the forms and set up the account they will not get the money. IT is scary to those who never had financial accounts except for bank accounts.

Maybe your siblings can start getting educated now, read a book or two, etc. My parents tried to teach the beneficiaries, but they were not good learners. They just figured when the time came, they would take the money and pay the taxes...until they saw how much taxes they would pay Now they wish they had listened and I get to deal with their questions.

Hard part was the IRA account has to be split all at once, so if one beneficiary does the paperwork, but another does not, the account can NOT be separated yet. Since they are selling assets the brokerage will not sell some and 'guess' that it is a fair split. They wait until all the beneficiary accounts are good to go, then they sell the assets in the original IRA account and split the dollar amount.

And some were faster than others, and some who were fast wanted the money immediately but had to wait for the slow poke. So I nagged the slow poke and everyone was mad at me. So you might want to let your siblings know that is the case and they can nag each other and not you That is what I finally did, let them nag the slow one themselves.
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Old 08-18-2017, 02:48 PM
 
Location: WA
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It is not that hard but still like pulling teeth with five siblings. All given detailed instructions how to establish the needed accounts on line. Two were easy and done in minutes. Two needed hand holding. One is still outstanding afraid of problems due to previous IRS problems.

Unfortunately the next step with a house sale and probate will have the same people slowing the process.
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Old 08-18-2017, 08:11 PM
 
Location: Florida
4,379 posts, read 3,718,272 times
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Quote:
Originally Posted by cdelena View Post
It is not that hard but still like pulling teeth with five siblings. All given detailed instructions how to establish the needed accounts on line. Two were easy and done in minutes. Two needed hand holding. One is still outstanding afraid of problems due to previous IRS problems.

Unfortunately the next step with a house sale and probate will have the same people slowing the process.
When you get to the end of probate (just before distributing assets) I would send a letter to each saying what you are going to do and asking for approval. I would also send them notes as you go along. This way you should be able to avoid problems.
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