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Hi Tess
i just went through the same thing. I was the executor, my five other siblings and I inherited about $650,000 each. My Dad had a couple million dollars in his IRA. The Brokerage House that managed the IRA broke it into six seperate funds for us six kids. The investments were corporate bonds, so we each inherited about 15 bonds through this IRA account. My Dad had reached the age where he had to take withdrawals so we also have to take withdrawals based upon each of our life expectancies. My brother cashed his bond fund in, paid the taxes and put the money into building a house. My sister is slowly transitioning he bonds over to stocks and personalizing the account for her age etc. I am keeping my share the way I inherited it and I'm enjoying the income that I am getting from the mandatory withdrawal. I also enjoy a tax deduction against that income. The 691(c) deduction is an offset you can use when your "tax due" bill comes in for that inherited IRA money. Look into it. It's good whether you cash it or withdraw it.
All of that being said, your parents' IRA's are pretty small. If your parents said the beneficiaries on these accounts are the three of you, then, if it were me, I would just cash the IRA's in and divide the money up between the siblings. The rules as to the minimum required distribution require annual calculations and I doubt that it would be worth it for so little money. Get your sisters agreement in writng and then just cash in the IRA's, pay the tax and divide the money.
Letting people do their own thing is best. My siblings and I got through the estate settlement stuff remaining the best of friends. In fact now we have a bit of an investment contest going on to see who does what with their money. Your parents would be proud of you. Good luck.
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