Clarification on EDBs
I have found the description of EDBs in two places. Can you clarify? I have copied both here :
Eligible designated beneficiaries are surviving spouses; minor children; beneficiaries not more than 10 years younger than the IRA owner; disabled individuals; and chronically ill individuals.
The Eligible designated beneficiaries include surviving spouses, chronically ill or disabled individuals, offspring of the original IRA owner who are under age 18, non-spouses who are at least 10 years younger than the owner and some trusts set up to benefit eligible designated beneficiaries.Aug 16, 2021
Permalink Submitted by Alan - IRA critic on Mon, 2021-10-18 15:35
The first definition is closer to correct, but the minor children should be expanded to state that the minor must be a child of the plan owner under the age of majority in their state or under the age of 26 if enrolled in a higher education program. The requirements to meet this age extension to 26 have not yet been defined by the IRS.
The first definition is correct with respect to individual beneficiaries not more than 10 years younger than decedent. The second definition is wrong and reverses the age description with respect to the 10 years.
Trusts with multiple beneficiaries with at least one of them being disabled or chronically ill will be able to stretch RMDs based on the age of the disabled beneficiary. Trusts with no disabled beneficiary will be subject to the 10 year rule.