Annual calculation of RMDs?

[Sunset]

But at the same time, the executor isn't obligated to scour the decedent's past for things that might have been done incorrectly that could result in a liability. The OP can assume that between his dad and TIAA-CREF that the past RMDs were computed correctly unless information comes to his attention that they were not done correctly and the fact that they didn't change isn't necessarily indicative of an error.

I'd let a sleeping dog lie and focus on the balance sheet at the date of death and subsequent transactions.

+1
It is not a debt as the IRS has not sent a bill for it, or even sent anything, as it may well not be owed anything. Don't folks trust our government.

Just as the cable company, Electric company, local grocery store, may or may not send something claiming a debt, but until they do, its not a debt.

Perhaps OP should be calling the cable company to ask them to review their records for the past 10 years to see that they charged enough and were paid enough as well

 

[Gill]

Creditors of Estate

In most states, the personal representative of an estate has an obligation to notify known creditors of the estate. Otherwise, it is the obligation of the creditors to file timely claims against the estate. In a sitiuation such as this it is possible to file a request with the IRS to release the PR on prior tax returns. This clears the PR to distribute the estate without risk of claims by the IRS. However, as I said above, I would do nothing.
Bruce

 

[ERD50]

But at the same time, the executor isn't obligated to scour the decedent's past for things that might have been done incorrectly that could result in a liability. ....

Yes, if it wasn't noticed, I think it would be safe to assume it was done correctly in the past. But now that the question is out there, I think it really should be addressed (just my personal opinion, no legal basis whatsoever).

As others have pointed out, you have the year end values (those are reported to IRS and you get a copy, IIRC), and you know the age. So a simple calculation.

It could also be that there was the 'leveling' request made earlier. I guess you'd need to find a record of that request to know for sure. Seems the IRS would need to know this. Did he do his own taxes yet? Seems there should be some record of this.

As a side note - though I'm a big fan of Vanguard, I am helping the family settle my FIL's estate, and Fidelity has been fantastic in working through things. And most other places (including Vanguard, unfortunately), have been awful). Even though I'm a default 'on-line guy', having a brick & mortar place to talk with, look over things, and provide services like Medallion Signature Guarantees has made things easier. I was there just yesterday to transfer some old bank accounts and an old IRA, and I asked a general estate question, and the rep called her resources, and called back this AM with an answer. Now that is service!

-ERD50

 

[pb4uski]

The only thing that the OP noticed is that the withdrawals were the same amount for the last few years... it could well be that the decedent was taking constant withdrawals because the amounts were comfortably over the minimums.

If the withdrawals were zero or some ridiculously low amount then I would concede that the executor would need to take a look, but baring that there is no obligation to do so and little risk of not doing so.

 

[Texas Proud]

I believe that the executor of an estate does have a legal obligation to use best efforts to identify all debts legally owed by the deceased, and to satisfy those debts with the proceeds of the estate. I have no idea how likely this is to happen, but it is possible that if you think there may be a debt owed to the IRS and you ignore it (as executor), then the problem becomes yours, not your father's.

But at the same time, the executor isn't obligated to scour the decedent's past for things that might have been done incorrectly that could result in a liability. The OP can assume that between his dad and TIAA-CREF that the past RMDs were computed correctly unless information comes to his attention that they were not done correctly and the fact that they didn't change isn't necessarily indicative of an error.

I'd let a sleeping dog lie and focus on the balance sheet at the date of death and subsequent transactions.

I am in both camps on this.... as executor you are supposed to satisfy all debts (if it is listed in the will) and use your good judgement... but I would also say that you have identified a potential liability.... you are not sure... and you plan to talk to TIAA-CREF about it....

If it were me, I would take a conservative view on this and calculate an amount that the IRS could say is owed and hold this amount for a few years... after three years, distribute the funds..... or distribute each years holdback after the time passes for the IRS to make a claim....

 

[steelyman]

I think the original question focused on a transfer to a spousal IRA. That's not especially complicated and (to me) is the first thing to focus on.

It's easy to feel overwhelmed by every item surrounding a death and settling things. Locating and claiming things that have been abandoned (I remember a term "escheated", but that might not be right) can be difficult.

It's a good time to do things like ensuring that the beneficiaries are up-to-date for the receiving IRA, that it's titled properly and so on. Consolidation, if you (and the decedent's spouse, if they are able) think that's the right thing to do.

As you say, it's also a good time to look at the same things for your own accounts, to help people down the road who may have to deal with the same things for your assets.

 

[Dog]

I agree with Texas Proud. If the estate is settled with heirs and the IRS eventually comes to collect, the Personal Rep/Executor is on the hook.
I'm close to finalizing my mother's affairs. Finishing up a couple of timeshare deed backs and clearing up healthcare billing. Unfortunately the hospital messed up on billing and sent bills to Medicare, she had USHFP that pays everything. The hospital argued with me, adamant that Moms primary insurance was Medicare - not so. So, I'm having the hospital resend bills to USHFP and asking hospital to reimburse Medicare. I will follow up to ensure this has been done, so I don't get a bill from Medicare someday in the future. PITA for sure.

Definitely a learning experience and a reminder to have our affairs in good order and clearly communicated to DD.



Sent from my iPhone using Early Retirement Forum

 

[ERD50]

...

Definitely a learning experience and a reminder to have our affairs in good order and clearly communicated to DD. ...

A BIG +1 on this.

A few years ago, my MIL said that she wanted to sit down with the 'kids' (and me, I'm a co-executor of their wills) when everyone was in town. She was aware her husband's mental acuity was degrading pretty fast. I prepared by buying the NOLO Executor's guide, but then she never called us together. I tried to push DW into bringing it up, but she wouldn't. Sure wish we had, it would have made everything so much easier.

Their estate isn't that large or complex, but they have so many accounts in different places over the years (chasing CD rates?), it is just a lot of busy work to round these up, and we could not move any of his that were in the trust until they were re-titled with his EIN. It would have been so much better to consolidate all this while they were both alive, at our pace, than to try to tackle it all after the fact, and now that MIL is in poorer health. Plus, we would have a clear picture of their AA, and could have at least talked about what to do with some of this money sitting in banks at 0.18% interest (or was it 0.018%?).

And as others are learning, these small banks don't seem to be very efficient with IRAs and transfers, and re-titling, etc.

We have a few more accounts than needed, I see. I will work on consolidating them as I do conversions to Roth, then get those IRA's and DW's 403b under one roof. And write something up for my wife and kids as well.

-ERD50

 

[BarbWire]

I think I will do nothing. I was able to calculate the underpayment for 2013 and 2014 (don't have the EOY 2011 figure readily available). It looks like he underpaid by about 1.5% -- which may be in the realm of noise in the eyes of the IRS.

But it is also possible that he did everything correctly using a different but accepted method.

If there had been a dunning letter from the IRS in the past three years he would have shown it to me, so I don't think they caught it. And now I know, moving forward with my mother's IRA, to make sure the calculation is done every year.

I'll revive this thread if the IRS ever rears up over this issue.

Thanks, everyone. Once again, I learned a lot.

 

[BarbWire]

I have found TIAA-CREF to be rather lackadaisical (messed up the taxes withheld for the RMD 2 years in a row). We now start in October to get that year's RMD by the end of December.

Yes, unfortunately TIAA-CREF has a reputation for messing things up. At my father's university folks got so upset that the university finally offered them other investment options. I pulled my funds (except the annuity which takes 9years + 1 day to move) from TIAA-CREF a decade ago.

On a slight tangent: my father's account was almost exclusively in the annuity (he had been drawing down the equities). The very good news is that the annuity is completely liquid for my mother in the spousal transfer: she is not trapped by the 10 year depletion rule.

 

[Rustic23]

RMD Calculator

The attached spreadsheet calculates RMD for my and DW's IRAs. Basically you enter your age, total IRA balance as of Dec 31, and it will calculate your RMDs. You can also enter an actual withdrawal and it will calculate a monthly withdrawal, and tell you if it is Green i.e. good or Red less than required. I only took the IRS chart to age 95, but it should be easy to add more years. I just really didn't think we would need it.

There are 10 items required to figure both RMDs. Age, Tax, Ira Balance, Name and Actual Withdrawal. I put each of these in Blue as the only thing need to be entered or change annually. The spreadsheet also allows you to enter the IRA balance in a column to save from year to year.


If anyone does look this over and find an error, please let me know! Our IRA's are with USAA and so far they give me the Dec 31st value, but nothing else.

Oh, and as usual the Numbers have been changed to what I wish I had!

**Mods if there is a better place to put this feel free to move it

 

[RonBoyd]

The attached spreadsheet calculates RMD for my and DW's IRAs.

Although the link reads RMD Calculator.xls , the actual file is "attachment.php." What program opens such a file?

 

[DatumPoint5]

The attachment can be "saved as" RMD-Caclulator.xls to your hard-drive. I think the attachment name just got messed up, but, the actual file is definitely an RMD Calculator spreadsheet.

I have downloaded and re-attached the file to this post. Hopefully it will be titled and "downloadable" correctly?!?


EDIT: the attachment did not change. It still tries to download as "attachment.php". None the less, just do a file/save-as to your choice of name with an extension of ".xls" and you will be able to open it as an Excel spreadsheet.

 

[Rustic23]

Interesting. I clicked on the link in RonBoyd's post and DatumPoint5's in both cases the xls file is downloaded. I don't have a clue what is going on.

For reference, PHP is a programming language used on servers. Example this Forum board is most likely written in PHP. Here is a wiki link:

http://en.wikipedia.org/wiki/PHP