New stretch ira and inheritance after beneficiary death
What are the new rules on distribution of leftover ira after the death of the benefitiary of the ira account? As an example, say son inherits father IRA and has 10 years to take distribution. The son dies after 6 years of inheritance of IRA. He names his daughter as beneficiary. What options does the daughter have in taking the distributions from what remains in the IRA account? Would the daughter have 4 years to complete the distributions from this account? What if the son was disabled when he inherited the IRA? What if the daughter was disabled when she took over the IRA after her father death. Note, new stretch IRA have special rules for disabled beneficiaries.
Permalink Submitted by Alan - IRA critic on Sun, 2020-01-05 23:39
Assuming all this takes place in the future under Secure, the daughter will have 4 years to drain the inherited IRA because the son was not an “eligible beneficiary”. If the son had been disabled when he inherited, he would be an “eligible beneficiary” for the Life Expectancy stretch. In this situation, the daughter would have 10 years to drain the inherited IRA whether she was herself disabled or not. Only the first beneficiary can be an “eligible beneficiary, a successor beneficiary cannot.