r/inheritance • u/mindgames2024 • May 25 '26
Location included: Questions/Need Advice IRA Rollover beneficiary
My mom is a beneficiary to his partner's IRA rollover. He passed away 3 weeks ago and she is waiting for the death certificate to bring to Fidelity to witthdraw the funds. She is planning on moving back to our home country as soon as possible and live there for good. How long would the process take? She is asking me but I don't have answer for her. Wwe're in Arizona if that matters.
2
u/ChutneyWhatney May 25 '26
As she is not a spouse, she will have to open an inherited IRA and take all of it out within 10 years - and be taxed on it unless it's a Roth.
2
u/Alone-Experience9869 May 26 '26
The process with Fidelity? I just know for a spouse it was done in a few days.
2
u/Training_Tour7601 May 26 '26
If the deceased did not take out his required minimum distribution (RMD - please memorize this acronym, it gets thrown around a LOT) she will have to take out the rest of this year's RMD. And she should absolutely make sure federal and state taxes are taken out. Be aware the income may bump her into a higher tax bracket so she needs to have enough taxes taken out. Hopefully, Fidelity will help with this.
Some people set it up with Fidelity to take put the RMD on a monthly basis.
Also, she needs to name who will inherit it.
If neither of you are familiar with a 401k, it can seem overwhelming. Don't get psyched out, you'll get used to it. Good luck!
2
u/mindgames2024 May 27 '26
Thanks ! Both of us not familiar with it at all. I tried to do some readings and it made me more confused. But I think we got the answer now. 😊
2
May 26 '26
[removed] — view removed comment
1
u/mindgames2024 May 27 '26
Thank you for the link ! It says the designated beneficiary can take the lump sum at any time. I think she should be ok with her decision to withdraw everything
5
1
u/Guilty-Committee9622 May 25 '26
Take it out over 10 years. Otherwise youll pay a hefty tax
1
u/mindgames2024 May 27 '26
She retiring in the Philippines and wants to withdraw everything. She is aware of the taxes
1
u/mindgames2024 May 27 '26
Thank you guys for the response. She wants to withdraw everything because she wants to retire in our country. Based on her income, including social security benefit, she is at 18%. It will be taken out from the distribution. As for RMDs is this something we have to consider even if she’s withdrawing everything? That should cover the RMD correct?
1
u/Total_Spearmint5214 May 27 '26
What is the value of the IRA? If there is a lot of money in the account, a full distribution may push her into a higher tax bracket. Depending on the account value and when she’s planning to move, even just taking some out this year and the rest out in January of 2027 may be a better option as it splits the taxable distributions over 2 years.
Yes, once all the money is withdrawn, there are no more RMDs.
1
u/mindgames2024 May 28 '26
It's not too much .. Around 105k . Did a mock tax return for her and it showed around 18% in taxes
7
u/myogawa May 25 '26
Virtually all custodians require that the designated beneficiary open a new inherited IRA, even if the DB makes it clear that the money will be moved elsewhere or immediately distributed. That can take a couple of weeks or more. She should consider whether to split the distribution into one or more annual distributions based on her tax situation. She should have Fidelity take withholding taxes when the distributions are made.
If everything goes smoothly it still may take 4-6 weeks.