Split Inherited IRA and then do a Trustee-to-Trustee Transfer?

[Guest TommyC]

My father passed away in 2001 and left three IRA's with 3 children as beneficiaries. As executor (and a child). I would like to do the following:

1) Create 3 sub-accounts for each of the IRA's with equal amounts. Each one titled "DEC John Doe, FBO Jane Doe". (or Jack Doe, or Jim Doe) assuming John Doe as the father and Jane Doe as one of the beneficiaries.

2) Each beneficiary then does a Trustee-to-Trustee Transfer to a new account with the same title.

3) Each beneficiary continues with the minimum withdrawal's using whatever rule is in place that day.

It appears to a Grey area reading all the posts, but right now, that's my plan.

[Guest AFRICA6796]

TommyC,

Remeber to include the age of the participant at death , when posing a question regarding beneficiary options. It helps to provide a more definitive and simplistic response. Some find the rules confusing , thereore it is usually better to tilor the response just to their specific case.

With that being said - how old was he when he died?

[Guest TommyC]

After I posted I realized that I forgot his age, my apologies. My father was 73, so he was taking distributions. I understand that distributions will need to continue in some manner.

My main reason for the post was that I had a half-hour discussion with someone from the IRS. Their position was that they'd prefer that his original IRA's not be touched or moved in any manner.

[BPickerCPA]

Whoever you spoke to at the IRS is wrong. First of all, make sure the year of death required distribution is taken. You can then split the IRA into separate IRAs and each child can use his/her own life expectancy. The first beneficiary distribution is for 2002.

[Appleby]

I must add that if your father did not take his required mimimum distribution (RMD) for this year ( the year he died) before he died, then the beneficiaries must take this RMD amount. This amount, even though it represents HIS RMD, must be reported in the social security number of the beneficiaries- not the deceased. For some custodians, this means moving the assets to the inherited IRAs established for the beneficiaries.