How to determine RMDs for 2019 Inherited Traditional IRA with 7 beneficiaries, 1 via trust.

[Gordon3]

If in 2019 a traditional IRA was inherited by 6 of 7 siblings as beneficiaries and the 1 remaining sibling inherited via a trust, can the RMDs be stretched over the life expectancies of each beneficiary?

The traditional IRA was inherited from the mother of these 6 siblings.

Each beneficiary including the trust received a separate new account for their portion of the inherited traditional IRA.

Based on https://www.irs.gov/pub/irs-pdf/p590b.pdf, I believe the sibling that inherited via a trust falls under the discussion of “Trust as beneficiary” that appears on page 12. If the 4 criteria listed in that section of the document are met, I believe this sibling may stretch the RMDs over their life expectancy.

Also based on https://www.irs.gov/pub/irs-pdf/p590b.pdf, I believe the other siblings fall under the discussion of “Separate accounts” that appears on page 12. That section indicates, “However, these separate accounts or shares won't be combined for required minimum distribution purposes after the death of the IRA owner if the separate accounts or shares are established by the end of the year following the year of the IRA owner's death.” Therefore, I believe these other siblings can stretch the RMDs over each of their lifetimes. Note that the last sentence in that section indicates, “The separate account rules can't be used by beneficiaries of a trust.” I think that these other siblings are beneficiaries of the IRA, and they are not beneficiaries of the trust that was inherited by the 1 sibling that inherited via a trust.

[AmyC · Accepted solution]

Correct, each beneficiary will take the RMD based on their own life expectancy. Good work!

I like this link, Inherited IRA.

[dmertz]

In addition to the other siblings being able to use their individual ages for calculate RMDs, the sibling who is the beneficiary of the trust can also use their own life expectancy to calculate RMDs if the trust is qualified for look-through:

1. The trust is a valid trust under state law, or would be but for the fact that there is no corpus.
2. The trust is irrevocable or became, by its terms, irrevocable upon the owner's death.
3. The beneficiaries of the trust who are beneficiaries with respect to the trust's interest in the owner's benefit are identifiable from the trust instrument.
4. The trustee of the trust provides the IRA custodian or trustee with the documentation required by that custodian or trustee. The trustee of the trust should contact the IRA custodian or trustee for details on the documentation required for a specific plan.

The deadline for the trustee to provide the beneficiary documentation to the IRA custodian or trustee is October 31 of the year following the year of the owner's death.