My father recently passed away with an IRA at a credit union in 3 CDs. My mother is the sole beneficiary. They are both on an automatic RMD plan that takes the distribution in mid Dec of each year. 

The credit union plans to transfer my dad’s CD amount to one of my mother’s CDs and to take the RMD for both accounts from her IRA (contains 5 CDs in same credit union plus the addition of my dad’s) in mid Dec this year as always. Is there any problem with doing it this way?

After your dad’s death, no RMDs should be paid using his Social Security number because the funds belong to the IRA beneficiary. Your mother can elect to treat your dad’s IRA as her own and then take his RMDs from her IRA.

I have been told that beneficiary IRAs are not pooled with other non-Roth IRAs when it comes to the pro-rata rule on Roth conversions because the beneficiary IRA is considered to still be in the name of the decedent. Is this true?

Yes. Beneficiary IRAs are treated separately for purposes of the pro-rata rule from your own IRAs. Roth IRAs are treated separately from your own IRAs as well as any beneficiary IRAs.

 

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