Oh, another question (sorry) … what if one of the beneficiaries takes enough out to meet the RMD of the decedent? Does that mean others would not be required to take their share? Or would (should) they still take the appropriate minimum fraction?
Vanguard was correct it doesn’t matter which beneficiary or combination of beneficiaries take the RMD.
This could be complicated if the beneficiaries don’t like each other. How the penalty would be assessed could be complicated.
The other item that was a surprise to me is that the administrator/executor has no right to know anything about the beneficiaries. The court had designated me as the administrator for the estate, but the custodian for the 401K wouldn’t even answer the question if a beneficiary was defined. They eventually transferred it to the estate which means no beneficiary was defined but still wouldn’t state it.
https://www.mariettawealth.com/news/required-minimum-distrib…
Does it matter who takes the RMD?
In the case of multiple beneficiaries, there is no rule on who takes the RMD and as long as the full RMD is taken, there will be no penalty. This can present a good opportunity if one beneficiary wants to liquidate the inheritance while others want to keep it invested. The heir who prefers cash in hand may be able to satisfy the full RMD with their portion, leaving the assets of the remaining beneficiaries invested.