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. What does U.S. law say about contingent beneficiaries?

    Learn about regulations the United States has on the naming of contingent beneficiaries, the types of contingencies that ...
  2. Places where I can open an IRA Account?

    Open an IRA through brokerage firms, mutual funds, banks and other major financial institutions, or through large Internet ...
  3. How do I change my contingent beneficiary?

    Learn what life insurance companies and retirement plan accounts require from you to change your contingent beneficiary designations.
  4. What kinds of assets can be included in a revocable trust?

    Understand what types of assets can be included in a revocable trust, and why some asset types are excluded from this estate ...
RELATED TERMS
  1. Contingent Beneficiary

    1. A beneficiary specified by an insurance contract holder who ...
  2. Self Invested Personal Pension (SIPP)

    A tax-efficient retirement savings account available in Great ...
  3. Elder Care

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

    Definition of Gold IRA
  5. Eligible Transfer

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

    The use – by a business owner or professional practitioner – ...

You May Also Like

Related Articles
  1. Trading Strategies

    Top 7 Roth IRA Stocks for 2015

  2. Professionals

    Are Longevity Annuities in 401(k)s a ...

  3. Professionals

    Why Retirement Advice Is Better But ...

  4. Professionals

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

  5. Professionals

    Ways To Cut 401(k) Expenses

Trading Center