IRA Required Minimum Distributions after Death
If you have an IRA, there comes a time when you will have to take required minimum distributions (RMD). You must start taking a RMD on April 1 after you turn 70 ½. The IRS has tables to determine the minimum amount you must take each year based on your age and the percentage you must distribute increase as you get older. If you have more than one IRA, you must make the calculation on each one separately. However, you can take the RMD for the combined total out of only one IRA if that is your desire.
If an IRA owner dies on or after his or her required beginning date, then a RMD to the extent unpaid to the IRA owner must still be paid to the year of the IRA owner’s death. According to the IRS, an unpaid required minimum distribution for the IRA owner’s year of death must be paid to the IRA owner’s beneficiary.
Most IRA owners tend to look at the tax-deferred growth of the IRA and do not generally take their annual RMDs during the first month or week of the calendar year
Example: IRA owner Mary died at age 75 on October 15, 2013. He would have attained the age 76 on December 1, 2013. The designated beneficiary of his IRA is his wife, Judy. For the calendar year 2013, his RMD for the calendar year 2012 based age 76 is $64,000. Prior to his date of death, Marty received $24,000 of his RMD for the calendar year 2013. The unpaid RMD of the calendar year 2013 as if the date of Marty’s year of death is $40,000. This unpaid required minimum distribution of $40,000 must be paid to Judy as soon as possible after Marty’s death.
The period after the death of a loved one is always a trying time. This is a matter that your ShindelRock professional should be consulted and they will assist you with this matter.