Remaining RMD 2020 – 4 Beneficiaries Equal Split?

Submitted by Mitch on Mon, 2020-01-27 20:07

My client passed on 1//3/2020 with a Traditional IRA. She obviously had not yet satisfied her 2020 RMD.

There are 4 beneficiaries. 3 are taking a lump sum distribution for their shares. 1 will roll his share to a Beneficiary IRA.

The 3 lump sum distributions will more than cover the total 2020 RMD amount.

So does the remaining RMD get split equally amongst beneficiaries and each must distribute their 1/4th?

My question is regarding the 1 choosing to roll to a Beneficiary IRA…. is he still required to distribute 1/4th of the 2020 RMD prior to rolling. Or has the 2020 RMD been satisfied by the 3 lump sum distributions? Is the 1 rollover now eligilible to roll hei entire amount with no distribution prior?



Submitted by Alan - IRA critic on Mon, 2020-01-27 20:51

  • The beneficiary that will stretch the inherited IRA (albeit likely under the 10 year rule), can ignore the year of death RMD and have their entire share transferred into their separate inherited IRA account. Even if there were no lump sum distributions, they could all establish their own inherited IRAs and then hash out how the year of death RMD would be apportioned between them. The IRA custodian has no authority to mandate that anyone take out the year of death RMD at any particular time. All the IRS cares about is that it is distributed to “a beneficiary” (ie any beneficiaries) by 12/31/2020, and that will definitely happen.
  • With respect to the Secure Act taking effect with deaths in 2020, it is interesting that the 3 lump sum beneficiaries would not have used the stretch even if client had passed in 2019. The other beneficiary will have to manage annual distributions over the 10 years despite no annual RMDs due, so that they don’t get hit with a large tax bill at the end.


Submitted by Mitch on Mon, 2020-01-27 22:34

Really appreciate your help.



Add new comment

Log in or register to post comments