Hello, I have a question about what the best plan of action would be to receive my mom's pension benefits for tax purposes. She passed 6 years ago and I did not know she had this pension through her job. I got a letter notifying me of it. I am the executor of her estate and have 5 siblings to share this with, do not know the amount as of yet. The plan administrator has told me it would have to be sent to me and I would have to distribute it to my siblings. So, I'm reading thAt I would have to take the tax hit...is there any other avenue to take to avoid this or limit it?
"The plan administrator has told me it would have to be sent to me and I would have to distribute it to my siblings."
That's only true if your mother did not designate any beneficiaries and her estate was the default beneficiary or your mother actually listed here estate to be the beneficiary. If individual beneficiaries were designated, other options should be available. Still there are late RMDs that would have to be made up before any possible direct rollovers to inherited IRAs. If your mother's estate is the beneficiary, only a distribution to the estate is permitted. If a distribution must be paid to the estate, the estate can pass the income through to estate beneficiaries on Schedules K-1 to be taxed on the beneficiaries tax returns instead of being taxable on the estate's income tax return.
If you are the only designated beneficiary, then your siblings are not involved.
"The plan administrator has told me it would have to be sent to me and I would have to distribute it to my siblings."
That's only true if your mother did not designate any beneficiaries and her estate was the default beneficiary or your mother actually listed here estate to be the beneficiary. If individual beneficiaries were designated, other options should be available. Still there are late RMDs that would have to be made up before any possible direct rollovers to inherited IRAs. If your mother's estate is the beneficiary, only a distribution to the estate is permitted. If a distribution must be paid to the estate, the estate can pass the income through to estate beneficiaries on Schedules K-1 to be taxed on the beneficiaries tax returns instead of being taxable on the estate's income tax return.
If you are the only designated beneficiary, then your siblings are not involved.