We just discovered an IRA account that belonged to my...
We just discovered an IRA account that belonged to my grandfather - he died 16 years ago! My grandmother died before him. There are no beneficiaries listed on the account, however his will states all assets be divided between his three kids.
We are concerned on how to distribute the assets, what are the tax ramifications other than ordinary income to the three kids? Do we have to reopen the estate? Will the IRS levy penalties because there were no mandatory distributions taken?
We are confused.
Expert Answer
You want to know what to do about an IRA account of your grandfather, who died sixteen years ago. You ask good questions about what can happen now, but unfortunately, I don't know the answers to most of your questions. You say your grandfather's will divided his assets between his three children. So those three are legally entitled to the funds in the IRA account, after whatever taxes and other costs are imposed. I'm not clear why you, who are a grandchild, are asking questions about this IRA account, rather than one of your grandfather's children.
Your situation is, to me, extremely unusual. I have never encountered anything like it. I have no idea what the tax ramifications would or could be, or what the IRS would do. I suggest you (or the three inheritors) consult with a good accountant, and see if she or he can suggest how you should proceed.