Successor Beneficiary Distribution Period
Article by By Sarah Brenner, JD IRA Analyst “How the SECURE Act Impacts Successor Beneficiaries” is very nice.
Earlier Alan opined that always RMD Distribution Period will get locked (whether owner or beneficiary or successor beneficiary die before or after 2020). That is same distribution period SLE or remaining 10-year period continues for successor beneficiaries. That made sense. But Sarah seem to imply that always 10-year rule will kick in for any new Non-EDB type beneficiary.
Because it changes the course to reduce the period or in case of older beneficiaries they get more time starting with 10 year period. I guess IRS must provide specific guidance on this to clear multiple interpretation.
Permalink Submitted by David Mertz on Tue, 2020-01-28 14:47
If you are referring to what Alan said after enactment of the SECURE Act, I think you are mistaken. Alan has agreed with Sarah Brenner that the successor to a designated beneficiary using SLE who dies after 2019 will be subject to the 10-year rule requiring the account to be distributed by the end of the 10th year following the year of death of the original beneficiary (although Alan might have initially said differently in his earliest posts following the enactment). The only thing that seems a bit up in the air is the distribution requirement for a successor to a successor beneficiary.
Permalink Submitted by Alan - IRA critic on Tue, 2020-01-28 15:22
There was also a situation that Natalie Choate pointed out where the owner AND the designated beneficiary pass prior to 2020. Due to the wording in the Secure Act it appears that the successor in this case is not subject to the 10 year rule, but rather can complete the RMD schedule of the designated beneficiary because they inherited from a designated beneficiary who passed prior to Secure. Of course, it is possible that coming IRS Regs may affect this interpretation. Further, if the IRA has already been inherited twice prior to 2020, completion of the DBs remaining LE will probably be less than 10 years in most cases.