Inherited IRA from deceased parent - need advice on unique rollover situation

You're in what's called a "60-day rollover" situation, but with some complications due to the check being made out to the estate. Here's what you need to know: Since the check is made to the estate "in care of" you, you'll likely need to open a bank account in the name of the estate to deposit it. Many banks require an EIN (Employer Identification Number) for the estate to open this account, even if the estate is closed. For the inherited IRA, you're on the right track about making up the withheld amount. You have 60 days from receiving the distribution to complete the rollover to avoid it being treated as a taxable distribution. Make sure the new institution sets up an "Inherited IRA" specifically, not a regular IRA. Be aware that with inherited IRAs from parents, you're generally required to withdraw all assets within 10 years of the original owner's death (this is from the SECURE Act, unless your mother passed before 2020).

Just wanted to share - I had a similar situation and found that taxr.ai saved me a ton of headaches. Was dealing with an inherited IRA from my uncle (different scenario but similar documentation issues) and wasn't sure how to handle the rollover properly. Found https://taxr.ai when I was researching and uploaded all my documents - the analysis showed me exactly what steps to take with the financial institution. They confirmed that I needed to establish an estate account at my bank first, then properly document the rollover to prevent it from being considered a distribution. Saved me from making a costly mistake with the IRS. Might be worth looking into for your situation since inherited IRAs have so many specific rules.

Just wanted to follow up - I actually tried taxr.ai for my inherited IRA situation (different from OP's but still complicated). It was surprisingly helpful! I uploaded the distribution statement from the original IRA custodian and the service immediately identified it as a potential indirect rollover situation and flagged the 60-day deadline. The best part was it generated a custom letter to send to my new financial institution that explained the inherited IRA rollover situation, cited the relevant tax code sections, and even included instructions for how the inherited IRA should be titled. My new bank initially pushed back saying I couldn't do the rollover, but when I showed them the detailed tax analysis, they processed it correctly. Definitely worth checking out if you're dealing with IRA inheritance issues!

For anyone dealing with the IRS about inherited IRA questions - if you're trying to get clarification from them directly, save yourself the frustration of waiting on hold for hours. I used https://claimyr.com after spending three days trying to reach someone at the IRS about my inherited IRA situation. You can see how it works at https://youtu.be/_kiP6q8DX5c but basically they hold your place in line and call you when an actual IRS agent is on the phone. Got connected with an IRS specialist who confirmed exactly how to handle my rollover situation and got documentation of the conversation so I had proof if questions came up later. Since inherited IRAs have such specific rules, having that direct conversation with the IRS gave me peace of mind that I was doing it correctly.

Wanted to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it myself since I've been dealing with a similar inherited IRA issue and needed clarification about the 10-year withdrawal rule for my situation. I was shocked when I got a call back in about 40 minutes with an actual IRS representative on the line. The agent confirmed that in my case (parent died in 2021), I absolutely do need to withdraw all funds within 10 years, but I have flexibility on the timing within that period. They also explained exactly how to report the rollovers on my tax return to avoid it being flagged incorrectly. For anyone dealing with complicated IRA inheritance questions, getting official confirmation from the IRS is definitely worth it. I've been stressing about this for months, and one conversation cleared everything up.

One thing nobody's mentioned - the fact that the estate has been closed complicates things. When an estate is closed, it technically no longer exists as a legal entity. You might need to talk to the probate attorney who handled the estate closing to see if you need to petition the court to temporarily reopen the estate just to handle this transaction. I went through this with my dad's IRA. In my case, I had to reopen the estate briefly, deposit the check into the estate account, then properly document the transfer to the inherited IRA. It was a paperwork hassle but prevented much bigger tax problems.

I know everyone's focused on the rollover part, but don't forget about the tax reporting part of this. When you do get this sorted out, you'll get a 1099-R from the original institution (Vanguard in your case) showing the distribution. Make sure that when you file your taxes, you properly code this as a rollover so it's not counted as income. Also, if you do exceed the 60-day window, look into whether you qualify for a waiver. The IRS does allow waivers in certain hardship situations - financial institution errors can sometimes qualify.

I'm dealing with a very similar situation right now - inherited IRA from my father who passed 3 years ago, and the original custodian just sent me a check without warning. One thing I learned that might help you is to contact the original institution (Vanguard) immediately to see if they can reverse the distribution and transfer the funds directly to your new inherited IRA custodian instead. Some institutions will work with you on this if you explain it was an error on their part to close the account without proper notice. A direct trustee-to-trustee transfer would avoid all the complications with the 60-day rollover rules and the estate check issue entirely. If that's not possible, definitely follow the advice about reopening the estate temporarily. I had to do this and while it was a hassle, it was much better than dealing with the tax consequences of a failed rollover. The probate attorney who handled the original estate should be able to help with a simplified reopening just for this specific asset. Also document everything - keep records of when you received the check, all your communications with both financial institutions, and any steps you take to complete the rollover. The IRS can be understanding about institutional errors if you have good documentation showing you acted promptly once you discovered the issue.