What happens to an RMD direct deposited after death? Part of estate or do IRA beneficiaries get it?
My dad passed away recently and I'm dealing with a confusing situation about his retirement distributions. He had been receiving monthly RMDs (Required Minimum Distributions) from his IRA, which were set up as direct deposits to his checking account. After his death, the Social Security Administration notified his bank, and they've frozen his account. I understand that money can still be deposited into the frozen account, but nothing can be withdrawn. Here's where I'm confused: My brother and I are the named beneficiaries on his IRA. However, his will established a trust that includes us plus several other beneficiaries (some charities and a couple relatives). The bank account where the RMDs were going will eventually be part of this trust. So my question is: If an RMD payment gets deposited into his frozen bank account after his death, does that money become part of the general estate (to be split among all trust beneficiaries)? Or since it came from the IRA where only my brother and I are named beneficiaries, should just the two of us get that money? I'm planning to contact the financial institution to stop the RMDs, but I'm worried one might get processed before that happens. This is my first time handling estate matters, so I appreciate any guidance!
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Ruby Knight
First, I'm sorry for your loss. This is a common but confusing situation. The key thing to understand is timing. Any RMD that was processed and deposited AFTER your father's date of death would technically belong to the IRA beneficiaries (you and your brother), not the estate. This is because at the moment of death, the IRA legally passes to the named beneficiaries, bypassing the estate and any trusts. The fact that the distribution landed in a frozen account doesn't change who legally owns those funds. However, there's a practical issue: since the account is frozen and will likely become part of the trust assets, you may need to work with the executor to properly identify and redirect those funds. You're absolutely right to contact the financial institution to stop future RMDs. The inherited IRA will have different distribution requirements for you and your brother as beneficiaries.
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Nina Chan
•Thank you for the explanation. So if I understand correctly, even though the money went into his account (which will become part of the trust), legally that money should still come to just my brother and me? Would we need to provide documentation to the executor showing the deposit date was after his death to prove it shouldn't be part of the general estate?
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Ruby Knight
•Yes, that's correct. Even though the money physically landed in an account that's now part of the trust, legally that money belongs to you and your brother as the IRA beneficiaries. You should definitely provide documentation to the executor showing the date of the deposit versus the date of death. Bank statements showing the deposit date, along with the IRA beneficiary designation document, should be sufficient evidence. The executor has a fiduciary duty to distribute assets correctly, which means ensuring these post-death RMD funds go to the proper beneficiaries rather than into the trust.
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Diego Castillo
I went through something similar when my mom died last year. I found this website called taxr.ai (https://taxr.ai) that really helped me figure out the inherited IRA rules - they analyzed all the distribution paperwork and explained what belonged to who. They actually have experts who review your documents and give you personalized advice for situations exactly like this. For me, they helped identify about $3,500 that had been incorrectly placed in the estate when it should have gone directly to the IRA beneficiaries.
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Logan Stewart
•How does that work? Do they just look at statements or do they actually help with getting the money back if it's already been misplaced?
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Mikayla Brown
•I've seen a lot of these "expert review" services pop up lately. How do you know they're actually giving correct advice? Did you double check with a real financial advisor or attorney?
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Diego Castillo
•They have you upload the relevant documents (IRA statements, beneficiary designation forms, bank statements showing deposits, etc.) and their tax specialists review everything and provide a detailed analysis. You get a personalized report explaining what belongs where according to tax laws. As for verification, I actually did double-check with my estate attorney, and he confirmed their analysis was correct. He said he was impressed with the level of detail they provided, especially about the specific IRS rulings that applied to my case. The documentation they gave me made it much easier to resolve the issue with the executor.
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Mikayla Brown
Just wanted to follow up about that taxr.ai website someone mentioned. I was skeptical but decided to try it for a similar situation with my uncle's estate. Uploaded my documents yesterday and got a comprehensive analysis today. They spotted a post-death RMD that had been incorrectly lumped in with the estate assets and provided the exact language from IRS Publication 590-B that I needed to reference. Already sent it to the executor and he's agreed to redistribute those funds correctly. Wish I'd known about this service months ago - would have saved so much confusion!
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Sean Matthews
If you're having trouble contacting the financial institution about stopping those RMDs, try using Claimyr (https://claimyr.com). I spent DAYS trying to get through to my dad's retirement company after he passed, and their phone system was a nightmare. Claimyr got me connected to an actual human in about 20 minutes when I had been trying for literally a week on my own. You can see how it works here: https://youtu.be/_kiP6q8DX5c. They basically hold your place in line and call you when a representative is about to answer. Saved me hours of frustration.
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Nina Chan
•How much does something like that cost? I've already spent so much on various fees dealing with the estate.
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Ali Anderson
•This sounds totally scammy. How does some random service magically get you through phone queues that everyone else has to wait in? I don't buy it.
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Sean Matthews
•The cost wasn't an issue for me given how much time it saved - it's basically like paying someone to wait on hold for you so you can go about your day. It's not magic - they use a combination of technology that navigates phone trees and keeps your place in line. Think of it like those restaurant apps that hold your place in line and text you when your table is ready. They don't get you special treatment or let you cut in line; they just handle the waiting part so you don't have to sit there listening to hold music for hours. For financial institutions with notoriously long wait times (especially when dealing with deceased accounts), it was completely worth it.
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Ali Anderson
I need to walk back my skepticism about Claimyr that I mentioned earlier. After spending THREE HOURS today trying to reach my aunt's pension administrator without success, I decided to try it. Within 45 minutes I was actually speaking with someone who could help me. I don't fully understand how their system works, but it definitely does work. They called me when they were about to connect with a representative, and I was able to get the RMD issue resolved in one call. Definitely using this for all the other financial institutions I still need to contact about my aunt's accounts.
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Zadie Patel
One thing nobody's mentioned yet - make sure you check if your father had already taken his full required RMD for the year before he passed. If he hadn't taken the full annual amount, there's still an obligation to withdraw the remainder of that year's RMD, and that would fall to the beneficiaries. The IRS doesn't forgive RMDs just because someone died.
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Nina Chan
•I hadn't even thought about that. How would I know if he'd taken the full amount for the year? He was getting monthly payments, but I don't know if they were calculated to satisfy the full annual requirement.
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Zadie Patel
•Contact the IRA custodian (the financial institution where the IRA was held) and ask for a statement of his RMD status for this year. They can tell you what his total required amount was for the year and how much had already been distributed. If there's still an outstanding amount, you and your brother as the beneficiaries will need to take that remaining distribution before the end of the calendar year to avoid a hefty 25% penalty tax on the amount not taken. This is separate from any beneficiary RMDs you'll need to take in future years under the inherited IRA rules.
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A Man D Mortal
Has anyone dealt with reversing an RMD that got sent after someone died? My grandmother passed in October and her November RMD went through before we could stop it. Is there any way to put that money back into the IRA?
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Declan Ramirez
•Unfortunately, once an RMD is distributed, there's no way to put it back into the IRA, even if the person has passed away. The IRS is very strict about this. The distribution becomes taxable income that needs to be reported, but as others have mentioned, it should go to the named beneficiaries of the IRA rather than to the estate.
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Julian Paolo
I'm dealing with a very similar situation right now with my father's estate. One thing I learned from our estate attorney is that you should also request documentation from the IRA custodian showing the exact date and time the RMD was processed, not just when it was deposited into the bank account. Sometimes there can be a delay between when the distribution is officially processed by the IRA custodian and when it hits the bank account. Also, if you haven't already, make sure to get certified copies of the death certificate to the IRA custodian as soon as possible. This officially notifies them of the death and should stop any future automatic distributions. Most custodians will also provide you with the necessary forms to establish inherited IRA accounts for you and your brother, which you'll need to handle future required distributions under the new beneficiary rules. The sooner you get this paperwork started, the easier it will be to sort out any post-death distributions that may have occurred.
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Dylan Mitchell
•This is really helpful advice about getting the exact processing time from the IRA custodian. I hadn't thought about the difference between when it's processed versus when it hits the bank account. That timing could be crucial for determining whether it belongs to the estate or the beneficiaries. I'm definitely going to get those certified death certificates sent over right away. How long did it take for your father's custodian to provide the inherited IRA setup forms? I'm hoping to get everything in motion before any more complications arise.
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