IRA to an Estate under SECURE Act
Did the SECURE change the NonnDesinated Beneficiary Rules for IRA’s payable to an Estate? Does the estate (or its beneficiaries get the 10 year option or only 5 year.
Thank you
Did the SECURE change the NonnDesinated Beneficiary Rules for IRA’s payable to an Estate? Does the estate (or its beneficiaries get the 10 year option or only 5 year.
Thank you
Permalink Submitted by Alan - IRA critic on Tue, 2022-04-26 21:24
Secure did NOT change anything with respect to estate beneficiaries.The 10 year rule is not an option, and the applicable distribution period remains the 5 year rule for deaths prior to RBD, or the remaining life expectancy of the decedent for deaths post RBD.
Permalink Submitted by Dennis D. Duffy on Wed, 2022-04-27 19:16
I assume this also means that there is NO RMD during that 5-year period also? The beneficiary can take any or none but empty the account no later than 5 years. And the 5 years is measured following the death of the IRA owner for deaths prior to RBD?
Permalink Submitted by Alan - IRA critic on Thu, 2022-04-28 00:34
Correct. There are no annual RMDs required within the 5 year rule, and the 5 year rule only applies if the owner passed prior to RBD. The executor will often wish to close the estate and assign the inherited IRA out of the estate to the estate beneficiary. The estate beneficiary will still be subject to the 5 year rule, but can decide when to take distributions within the 5 year period.