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Rizzo21:

"JAFO, Thank you. That information is helpful. Their chart with the distribution rules could be the information I was looking for."

You are welcome.

"Sounds like Schwab is like the custodian that my sister's IRA was originally with in that they will not split the assets out of the estate and into multiple accounts. I moved the IRA to a custodian that WOULD do that."

Based on several things that you wrote, I would suggest that you seek professional advice (and not rely on these boards).

If you were not named as a beneificary of the IRA, then as I understand the law, your custodian and Schwab are coorect that the account cannot be split.

"She had another, smaller IRA with a different company and they would not even allow me a custodian-to-custodian transfer. That one I simply distributed in full to the Estate account so it will be taxable at estate tax rates."

All the IRAs would, I believe, be part of the gross estate and potentially taxable for estate tax purposes; I am not sure what the transfer (or lack of transfer) has to do with the estate taxation.

"Learned a lot through this process and would advise anyone, by all means, to avoid having assets go through the estate. She told me before she passed away that the larger IRA was already POD to me (which I would somehow split to my brother) and I never verified it. Big mistake! After she passed away, I had the unpleasant surprise that it wasn't and I've had to go through this mess to settle things."

Which is why most on these boards suggest avoiding DIY estate planning. The problems often do not come to light until it is too late to fix them because the deceased is in fact deceased.

You need to read IRS Publication 590 -
http://www.irs.gov/pub/irs-pdf/p590.pdf especially starting at page 18 (including the definition of inheritied IRA)

to confirm what is permissible.

Again, my understanding is that if you were not named a beneficiary of the IRA, and it went to the estate, and then to you because of a will or the applicable intestacy laws, it is no longer an "inheritied IRA" within th emeaning of of the law.

Regards, JAFO

"DISCLAIMER - NONE OF THE FOREGOING IS TAX OR LEGAL ADVICE. PLEASE DISCUSS WITH A PROFEWSSIONAL THAT YOU HIRE.
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