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A beneficiary of a self-directed inherited IRA took a distribution and used part of it to buy his girlfriend a car, prompting his sister, who inherited the same account, to fear he had jeopardized the entire estate.
Once an inherited IRA is properly divided, each beneficiary is generally responsible for their own account, but the case highlights complications that arise when the account holds rental properties and private notes rather than publicly traded securities.
The siblings' mother died and left a self-directed IRA containing two rental properties and several private notes, split evenly between her two adult children. The brother took a distribution and purchased the vehicle.
His sister's concern was less about the spending decision than about whether he had somehow exposed her share.
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