Secure Act – 10yr Payout / Non-spousal Bene that passes away

What happens if a parent is the beneficiary of a clients IRA. Then, the parent passes away before the 10 years are up. Do the non-spouse beneficiaries of the original Bene IRA get a new 10 year pay out with their respective “new” Beneficiary IRAs? Thanks.



When did client pass?  This year or prior to the Secure Act?



This was a supposed question, one of our clients is in bad health. 



Then client will eventually be passing subject to Secure. The parent beneficiary will obviously be “not more than 10 years younger” than deceased owner, therefore the parent is an EDB (eligible designated beneficiary) and can stretch the inherited IRA over their single life expectancy rather than the 10 year rule. Then, when the parent passes, the successor beneficiaries named by the parent will be subject to the 10 year rule starting in the year after parent passes. While this may extend the total distribution by more years, if the parent is older their annual RMDs will draw down the IRA balance at a rapid rate, leaving little for the successor beneficiaries.



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