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. Can the non-spouse beneficiary of an IRA name a successor beneficiary?

    Whether the beneficiary of an individual retirement account (IRA) can name a successor beneficiary (second generation beneficiary) ... Read Answer >>
  2. Upon my death, will the beneficiaries of my IRA be compelled to take the entire amount ...

    It depends. If the beneficiary of your IRA is your spouse, he or she will be eligible to transfer the amount to his or her ... Read Answer >>
  3. If a trust is named as the beneficiary of an IRA, can the trustee of that trust become ...

    While the IRA owner is alive, only the IRA owner can change the designated beneficiary of the IRA. Exceptions may apply if ... Read Answer >>
  4. My spouse is the primary beneficiary of my IRA. I also have a contingent beneficiary. ...

    A spouse who is the sole primary beneficiary of an IRA can always treat the IRA as his or her own. The contingent beneficiary ... Read Answer >>
  5. Can an IRA beneficiary roll the IRA over into another account and designate another ...

    It depends on the provision of the IRA plan document. Some (though very few) do not allow the designation of successor beneficiaries. ... Read Answer >>
  6. Can I put my IRA in a trust?

    Learn the proper way to transfer ownership of your IRA to a trust. Consider how naming the trust as a beneficiary affects ... Read Answer >>
Related Articles
  1. Retirement

    Inherited IRA and 401(k) Rules: Don't Run Afoul

    What you need to know when it comes to the complex rules for inherited IRAs and 401(k)s.
  2. Your Clients

    Top Estate Planning Tips for 401(k)s and IRAs

    Here's how to avoid estate planning pitfalls when it comes to leaving IRA and 401(k) assets to heirs.
  3. Retirement

    Designating A Trust As Retirement Beneficiary

    Designating a trust as your IRA beneficiary can be beneficial, but it requires proper planning to avoid problems.
  4. Retirement

    Mistakes In Designating A Retirement Beneficiary

    Make sure your beneficiary designations not only reflect your intentions but also meet the requirements to be effective.
  5. Home & Auto

    Why Your Will Should Name Designated Beneficiaries

    Find out how to make the tough decisions when it comes to choosing who will receive your assets and how they will be paid out.
  6. Retirement

    The Complete Guide To Retirement Planning For 50-Somethings: Beneficiary and Estate Planning

    Beneficiary DesignationsIt is possible that you will not spend all of the funds that you save in your retirement nest egg. As such, you should make plans to ensure proper disposal of those assets, ...
  7. Taxes

    4. Rolling Over an Inherited IRA

    Avoiding these five common tax mistakes can really pay off on your way to retirement
  8. Financial Advisors

    How to Handle Client Beneficiary Designations

    Beneficiary designations are a critical financial planning step that can be easily overlooked. Here's how to ensure they are properly done.
  9. Financial Advisors

    IRA Holders Face New Rules in 2015

    New rules for IRA holders mean less loopholes in 2015.
  10. Investing Basics

    How Advisors Can Protect Inherited IRAs

    A new Supreme Court ruling has some financial advisors rushing to set up trusts to help protect inherited IRAs. Is that necessary?
RELATED TERMS
  1. Extended IRA

    An IRA that allows a second generation beneficiary to continue ...
  2. Inherited IRA

    An individual retirement account that is left to a beneficiary ...
  3. Stretch IRA

    An estate planning concept that is applied to extend the financial ...
  4. Secondary Beneficiary

    A person or entity that inherits assets under a will, trust or ...
  5. Primary Beneficiary

    A beneficiary in a will, trust or insurance policy that is first ...
  6. IRA Asset Will

    A document that specifies how the assets in an individual retirement ...

You May Also Like

Trading Center