Inherited IRA

[Jilliandiz]

A daughter inherits her mother's IRA. She was notified by the investment company that she had 60 days to request a rollover, etc. She was not aware that if she didn't respond, she would be paid out as a lump sum distribution. She would the opportunity to have the money redeposited and a rollover check issued to her instead.

What's the distribution timeline for IRAs? 5 years? Deceased life expectancy?

Can someone clear things up for me?

[mbozek]

Non spouses cannot rollover an IRA distribution. When the owner dies before benefits commence the payments can be made in a lump sum not later than 5 years after the owner's death or over the lifetime of the beneficiary. The investment co seems to be rather stupid- why wold they cash out the IRA assets without the consent of the beneficiary instead of retaining the assets? However the terms of the IRA control the distributon in the event of the death of the owner. If she has not cashed the check see if the investment co will accept a return of the funds and allow her to keep the IRA account as an inherited ira subject to the MRD rules. See IRS pub 590.

[Jilliandiz]

Thanks for your response!

What if the mother died at age 80, and had begun taking RMD's before her death....does that change anything for the beneficiary???

[Guest SelfDirectedIRA]

You could set up a self directed IRA with the funds and not be bothered with investment companies or administrators offering you very limited investment choices.

[Appleby]

You could set up a self directed IRA with the funds and not be bothered with investment companies or administrators offering you very limited investment choices.

Good suggestion, but if they already sent her a check, it is too late for that. The only option would be the one mbozek suggested, which is to see whether the financial institution would VOID the check, and return the amount to the IRA with neither of the transactions ( debit/credit) being reported