My mother inherited my father's IRA. When she died, I received an account application listing me as the beneficiary, as well as notice that my brother and I will have to take my mom's required distribution. My brother is nowhere to be found. How should I

By Denise Appleby AAA
A:

If your brother cannot be found, you may want to check with the IRA custodian and/or the financial advisor to find out if the IRA plan document includes any provisions for such a situation. For instance, some IRA documents state that if a beneficiary cannot be found, that beneficiary will be treated as if he/she is not a beneficiary of the IRA. If the IRA you inherited includes such a provision, you may be treated as the sole primary beneficiary - provided reasonable efforts are made to locate your brother.

Generally, the required minimum distribution (RMD) for the year of death should be distributed by all the primary beneficiaries on a pro-rata basis. In your case, your brother would withdraw 50% from his share and you would withdraw 50% from your share, assuming that you are supposed to receive 50% each. If he cannot be found, it may make sense for you to withdraw the full RMD amount, especially if it's possible that his share of the assets will go to you. This will help to ensure that the 50% excess accumulation tax does not apply to any amount.

To learn more about IRA distribution, check out Who Is The Beneficiary Of Your Account?, Inherited Retirement Plan Assets - Part 1, Inherited Retirement Plan Assets - Part 2 and Disclaiming Inherited Plan Assets.

This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS

  1. How do deferred tax assets help in meeting retirement goals?

    Learn how tax deferred assets can help individuals achieve long-term financial goals such as retirement and how they differ ...
  2. What are the best ways to pay less income tax?

    Learn about reducing your income tax burden by contributing to an employer-sponsored retirement plan or IRA, and see what ...
  3. Who does Warren Buffett plan to bequeath his estate to?

    Find out how much Warren Buffett is leaving for his heirs and how he wants the funds invested after his death. Learn about ...
  4. What are the most common deferred tax assets used by individuals?

    Use these deferred tax assets to reduce your tax liability and grow your assets simultaneously. Discover the most common ...
RELATED TERMS
  1. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  2. Gold IRA

    Definition of Gold IRA
  3. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  4. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...
  5. Peri-Retirement

    A term for the period of time leading up to actual retirement. ...
  6. MyRA

    A new tax-advantaged retirement account that President Barack ...

You May Also Like

Related Articles
  1. Professionals

    Why Retirement Advice Is Better But ...

  2. Professionals

    Coming Soon: Private Equity In 401(k) ...

  3. Professionals

    Ways To Cut 401(k) Expenses

  4. Professionals

    Tread Carefully With Retirement Plan ...

  5. Professionals

    Required Minimum Distributions: A Reminder

Trading Center