May an IRA beneficiary transfer the IRA to a different custodian following the death of the IRA owner?
January 19, 2000 Question: My mother inherited my father’s IRA. My brother and I each were named 50% beneficiaries. My mother died in 1995 and we kept the IRA intact, taking distributions yearly based on my life expectancy. We would like to transfer the IRA to a different brokerage house and divide it, one half to me; one half to brother and continue to take the yearly distributions as before. This way we could each manage our own account. Can this be done? Answer: Yes. The IRS routinely allows beneficiaries to split and transfer a deceased owner’s IRA to a different custodian. See, for example, Private Letter Rulings 9106044, 9106045 and 9623037. Two words of caution, though. The transfers of assets should go directly from the existing IRA custodian to the new custodian, without a check being written or assets distributed to you or your brother.
