Inherited IRA - Anyone ever have one?

D

David Donner

Unfortunately, I am receiving an Inherited 401K from the company my father worked for before he passed away earlier this year.
Has anyone ever dealt with one before? If so, any tips?
I am considering moving it to an Inherited IRA at Fidelity but am at the very very beginning of looking at what to do.
Any tips with transferring it to Fidelity vs another broker?
I am assuming (as I said I am just at the extreme beginning of this process) that I can transfer it to Fidelity (or another broker) without it being a taxable event.
Any tips on any of this would be greatly appreciated.
 
I have received an inherited IRA. I am with TD and all I had to do was fill out a transfer form however there were some things I had to have the current broker do such as sell-off fractional shares. Not a big deal.
 
I have an Inherited IRA. I took out the required RMD for 2022 and left enough cash for 2023 at the same brokerage firm my Dad had his. Then I took the rest of the money and transferred it to Midland IRA and invested the money in two hedge funds that I also have direct investments in.
 
David Donner said:
Unfortunately, I am receiving an Inherited 401K from the company my father worked for before he passed away earlier this year.
Has anyone ever dealt with one before? If so, any tips?
I am considering moving it to an Inherited IRA at Fidelity but am at the very very beginning of looking at what to do.
Any tips with transferring it to Fidelity vs another broker?
I am assuming (as I said I am just at the extreme beginning of this process) that I can transfer it to Fidelity (or another broker) without it being a taxable event.
Any tips on any of this would be greatly appreciated.
More...

There is a required RMD (Required Minimum Distribution) for "IRA inherited by someone other than spouse". The IRA is required to be fully distributed within 10 years. Here's a link to get you started...

https://www.forbes.com/sites/juliej...ng-rmds-for-an-inherited-ira/?sh=4d182edc4b1c
 
I have one also. I lucked out in a sense that it was 12 years ago now so I fall into the old way of distributions and can have it run for basically my lifetime with minimum distributions each year.
I am at Schwab and the process was easy. I worked with a rep who knew what to do and transferred it without touching it so avoided any tax issues.
 
If you want to trade options with it, you may find some major differences among brokers in terms of what is allowed.
 
tango29 said:
I have one also. I lucked out in a sense that it was 12 years ago now so I fall into the old way of distributions and can have it run for basically my lifetime with minimum distributions each year.
I am at Schwab and the process was easy. I worked with a rep who knew what to do and transferred it without touching it so avoided any tax issues.
More...

The old deal was too good. The IRS had to "fix" it. :)
 
I helped someone set one up at Schwab a couple years ago. She already had an account at Schwab. With the same login credentials, she was able to open up the inherited IRA account online. In other words, once you are logged in, there is an option to open a new account, and then you choose which type. And one of the types is an inherited IRA.

It was a relatively straightforward process. She had to have the proper title for the account, and a couple other data points, e.g., the date of death, when she set it up online. Once that was done, she filled out a form provided by the financial institution that was holding the account. The form was basically instructions to send the funds by ACH.

That form might have been available online. I think she was given online credentials by the institution that was holding her deceased father's account, because she was the beneficiary of that account.

Occasionally, the process can get clunky, or something will go wrong. You might have to send them a copy of the death certificate, or a copy of the will, or a court order that identifies the executor of the estate. If they need that stuff, they'll tell you.

It's not that complicated.
 
If you are not doing exotic trading, I would say Fidelity or Schwab. They have dedicated people who do this all day, every day. They know the ins and outs of the process...Hand holding that you may need.
 
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