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I am executrix of the estate, as well as one of 3 beneficiaries on my Mom's IRA. Mom passed away earlier this year; when my father died last year, she assumed his IRA as her own. Both were already well into receiving annual required minimum distributions due to their ages.

The account is held in an IRA CD with a local bank. The manager of the bank is telling me that I need to roll the funds into 3 IRAs, one in each beneficiary's name, as we can assume the IRA proceeds as our own. No other options have come to mind, as far as he is concerned. (I do realize that the bank is looking to preserve any deposits they can.)

If we do this, it appears (from the IRS website) that we must maintain minimum distributions annually. None of us is near 59 1/2 years old (the youngest is 39), so I am curious as to how this will work. Would we pay a penalty for withdrawing prior to reaching age 59 1/2, in addition to declaring the distributions as taxable income? If we opt to just redeem the IRA and distribute 3 ways, are there tax implications?


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