How to divide a deceased parent's IRA

DEAR HARRY: My father died in November. As part of his estate, there is an IRA worth about $35,000.

My deceased mother was the primary beneficiary named in the IRA documents and in his will. My sister and I are contingent beneficiaries. My sister is 36 and I'm 24, so we have pretty different life expectancies.

Can we each roll over our share into our own IRAs? Must I use my sister's life expectancy for withdrawals because it's shorter? Are we required to withdraw all of it in five years?

We are both mixed up, and our lawyer is of no help. Please direct us.

WHAT HARRY SAYS: You have until Dec. 31 to split the IRA into two.

Do not roll them over to your own IRAs, or that will be treated as a withdrawal.

Instead, have them individually titled as "John Smith (deceased Nov. 10, 2013) IRA FBO Jane Doe beneficiary." Then you may each withdraw at least the required minimum distribution each year based on your own life expectancy.

This is an easy-to-follow rule that will keep you out of trouble with penalties. Your first distribution must be made before Dec. 31.

A number of regulations do not apply in your situation.


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