Beneficiary payout

[Guest tws]

May an IRA sponsor require that all distributions to beneficiaries be paid out in a lump sum rather than over the beneficiary's life expectancy?

[mbozek]

IRA distribution provisions usually provide that distributions will be paid in accordance with the MRD rules of IRC 401(a)(9) whcih permit payment over a beneficary's life expectancy. However there is no requirement that such option be provided. If the IRA custodian only permits payment in a lump sum the beneficiary can move the funds to another IRA custodian tax free as a trustee to trustee transfer.