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We have an IRA customer who passed away last year. He named his five children as beneficiaries. They want to know whether they have to break down the IRA into five inherited IRA’s — one for each beneficiary. – IBA Compliance Connection

We have an IRA customer who passed away last year. He named his five children as beneficiaries. They want to know whether they have to break down the IRA into five inherited IRA’s — one for each beneficiary.

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No, we are not aware of any requirement that multiple IRA beneficiaries must open separate inherited IRA accounts, but the IRS rules permit them to do so at any time.

For resources related to our guidance, please see:

  • IRS Publication 590-B  — Distributions from Individual Retirement Arrangements (IRAs) (2015) (“A single IRA can be split into separate accounts or shares for each beneficiary. These separate accounts or shares can be established at any time, either before or after the owner's required beginning date.”)