Successor inherited IRA beneficiary under SECURE

Submitted by BruceM on Thu, 2020-01-16 22:58

Hello, and I’ve got another couple of questions…..

I’ve read that the successor beneficiary, when the primary Eligible Designated Beneficiary dies, the successor will be subject to the 10 year rule rather than continuing RMDs as though the original beneficiary had not died. If so, a couple of questions on this:

1. Does the 10 years for the successor begin the year following the year of death of the EDB?

2. Does it matter that the successor is another EDB…say another sibling?

3. If the original beneficiary is a non-EDB and dies prior to the 10 year payout, will the successor have to pick up where the same 10 year period to finish it out, or will the success get a fresh 10 years?

Thanks

BruceM



Submitted by Alan - IRA critic on Thu, 2020-01-16 23:46

  1. Yes, it starts following the year of death of the DB, who Secure states is to be treated as an EDB.
  2.  No specification, but probably not once clarified.
  3.  Successor to 10 year would have to drain by the end of the existing 10 years. Otherwise, the stretch would be increased even compared to old rules.
  4. Secure indicates that a successor to a DB is subject to the 10 year rule for owner deaths prior to 2020. But Natalie Choate points out that if the DB ALSO passed prior to 2020, the new successor inherited from an existing successor, not from a DB. Therefore, technically the new successor can finish out the existing LE schedule. I imagine there are a quite a few inherited IRAs out there now FBO a successor beneficiary.


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