Yes, I meant exactly that. By splitting the IRA inherited by the estate into separate inherited IRAs, one for each estate beneficiary's share, the separate inherited IRAs can be distributed to the estate beneficiaries intact. The estate beneficiaries become successor beneficiaries. It's similar in nature to a successor beneficiary inheriting an IRA previously inherited by an individual. The result is that the inherited IRAs for the benefit of the successor beneficiaries being subject to the same RMDs, the beneficiaries receiving the same money, and the beneficiaries paying the same taxes as if the estate continued, distributions were paid to the estate, and then this income to the estate was passed through to estate beneficiaries. Numerous PLRs have invariably determined that this is acceptable. Some custodians are not savvy enough to know that this is permissible, so one might have to transfer the estate's inherited IRA to a more competent custodian who will accommodate the splitting and distribution of the separate inherited IRAs.
Estate as beneficiary means that the estate is the beneficiary, not that there is no beneficiary. There is *always* a beneficiary. It does meant that there isn't a "designated" beneficiary, that the beneficiary is not an individual.
(The situation is different of the account is in a qualified retirement plan like a 401(k). If the deceased's estate is the beneficiary of a 401(k) account, the only option is distributions to the estate. Only a designated beneficiary can roll an inherited 401(k) to an inherited IRA, and an estate cannot be a designated beneficiary since the estate is not an individual.)
