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#2039214 - 09/17/15 08:47 PM Transfer of an inherited IRA
Mike Baker Offline
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Mike Baker
Joined: Dec 2002
Posts: 192
Tennessee
The bank where my mom had her IRA and which set up the inherited IRA for me upon her death is closing its branch, and I want to transfer the IRA to another financial institution. One reason that I continued to use that bank is because they had the "audit trail" with her death certificate and the transfer to my IRA from hers. That bank set up my required minimum distribution [due to her death...otherwise I am not at the age to withdraw without tax penalty], and all has been going well. I do not work with deposit products at the bank where I am employed, and it has been a very long time since I have done so. I just wanted to check...are there any "caveats" with regard to transferring this IRA to another bank, or is it just like transferring any other IRA? I would want it to be a "bank to bank" transfer, with the check not made to me peronally. However, if the bank that has it now were to want to charge me a fee for transferring to another bank, what if I did a complete distribution instead and transferred it to my savings account there? Could I then roll it over to another bank without incurring any type of tax penalty? In that scenario, it concerns me that the complete distribution would be coded "distribution due to death" whereas the rollover deposit would likely be coded just as "rollover." Regardless of whether it is handled as a bank to bank transfer or a rollover, what would I need to inform the bank to which I transfer the IRA so that my required minimum distribution [due to death] would continue? Thank you for your time and input.
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#2039239 - 09/17/15 09:23 PM Re: Transfer of an inherited IRA Mike Baker
edAudit Offline
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edAudit
Joined: Jul 2008
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That bank set up my required minimum distribution [due to her death...otherwise I am not at the age to withdraw without tax penalty],

Would that be over 5 years? 5 year payout method

I too have been out of the IRA business for a few years but thought that only a surviving spouse can use the RMD method.
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#2039281 - 09/18/15 01:35 AM Re: Transfer of an inherited IRA edAudit
Mike Baker Offline
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Mike Baker
Joined: Dec 2002
Posts: 192
Tennessee
The RMD was set up using my life expectancy; apparently that was a valid option.

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#2039282 - 09/18/15 01:55 AM Re: Transfer of an inherited IRA Mike Baker
rlcarey Online
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rlcarey
Joined: Jul 2001
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Galveston, TX
There is no 60-day rollover rule for inherited IRAs. If you withdraw the money, it's taxed.

You are going to have a pick a custodian and then ask them what you need to do in order for them to accept such a transfer. There is probably no standard answer.
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#2039290 - 09/18/15 12:03 PM Re: Transfer of an inherited IRA rlcarey
Mike Baker Offline
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Mike Baker
Joined: Dec 2002
Posts: 192
Tennessee
Thank you. So if the bank imposes a fee for transfer, I will just have to accept that and go on. I do intend to quiz the bank to which I will deposit the transferred funds just to make sure that everything is documented and set up appropriately. As I said, it has been many years since I worked in the deposit area, but it would seem that there would be some type of standard procedure for handling a transfer of an inherited IRA, as I would think that would be a type of transaction that is going to come up from time to time. In any case, I appreciate very much everyone's input.
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#2039355 - 09/18/15 03:44 PM Re: Transfer of an inherited IRA Mike Baker
Elwood P. Dowd Offline
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Elwood P. Dowd
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If you inherited the IRA your age is irrelevant. All amounts withdrawn will be taxable, but there is no premature distribution penalty.

An inherited IRA can be transferred from Bank A to Bank B. As noted, there is no "rollover" option for an inherited IRA. There is no "rollover" code. If you walk out with a check payable to you it's taxable and classified as a "distribution due to death."
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#2039429 - 09/18/15 05:45 PM Re: Transfer of an inherited IRA Mike Baker
el guapo Offline
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el guapo
Joined: Jul 2004
Posts: 345
One thing that you need to be prepared to do is determine your own RMD amount, as the new IRA Custodian will not have any of the relevant information necessary to properly determine what your distribution options were and what calculate your distribution amount going forward. If they tell you they will "handle it" and do not ask you a laundry list of questions you should be very cautious about whether they know what they are doing, as it isn't easy determining a beneficiary's distribution method and amount when an inherited IRA is transferred from the custodian that held the original IRA.

The easiest thing to do is ask the current IRA Custodian what the divisor is that they were going to use, or have already used for 2015. You then subtract by '1' each year going forward when calculating your mandatory distribution amount. This is assuming that you were eligible to use the single life, non-recalculated life expectancy method.

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