Can an estate inherited IRA be split?


Quick Answer

An estate-inherited IRA may be distributed to several individuals, says the Nest. IRA funds can be withdrawn and made part of the estate, or the account may be transferred to the beneficiary accounts.

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Full Answer

The estate executor can close the IRA, pay taxes on the distribution and divide the remaining funds among the decedent's beneficiaries or keep the IRA open and divide the required distributions after taxes between the beneficiaries, says the Nest. The executor also may divide the IRA into separate IRAs for each beneficiary, notes Appleby Retirement Dictionary. The new IRAs are subject to the same distribution rules as the original.

The IRS states that it treats the estate-inherited IRA as if there is no designated beneficiary. Therefore, all funds must be withdrawn within five years, unless the owner was over the required minimum distribution age, in which case the withdrawals must start immediately.

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