How the Inherited IRA Rules Work with Multiple Nonspouse Beneficiaries

AuthorSeymour Goldberg
ProfessionSenior partner in the law firm of Goldberg & Goldberg, P.C., Woodbury, New York
Many of the rules in general that apply to an inherited IRA for a non-
spouse beneficiary may apply to multiple nonspouse beneficiaries of an
inherited IRA. However, there are a significant number of differences
in applying the multiple nonspouse beneficiary rules. The key to the
multiple nonspouse beneficiary rule is the timely implementation of
the rules after the death of the IRA owner. The timely implementation
rules apply regardless of the age of the IRA owner at the time of his / her
Assume that Jack, an IRA owner, died on July 1, 2016, at age 65. Fur-
ther assume that the nonspouse beneficiaries of his account were Todd,
his grandson, whose date of birth is March 1, 1997, and his son, Fred,
whose date of birth is August 15, 1977. Also assume that Todd and Fred
are equal beneficiaries of Jack’s IRA account.
According to the IRS, if Jack’s deceased IRA is divided in a cer-
tain manner and by a certain date, then each nonspouse beneficiary may
then use his / her term- certain life expectancy period in determining the
required minimum distributions from his / her pro rata share of Jack’s
deceased IRA account. The separate account rule if properly and timely
implemented is effective, commencing in the calendar year after the
death of the IRA owner.
In the case involving Jack’s deceased IRA, it is important that Todd
and Fred act timely and correctly in order to implement the rule. The
author refers to the rule as the separate account rule.
The best way to illustrate the rule is by means of several examples.
These examples follow:

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT