Is a older sibling a eligible designated beneficiary

Submitted by rosalyn malin on Mon, 2024-11-04 14:38

Since an eligible designated beneficiary is someone who is “not more than 10 years younger” than the deceased, what is the situation of a sibling who is a year OLDER than the deceased?  Would the sibling be considered a noneligible designated beneficiary or an eligible designated beneficiary?



Submitted by Alan - IRA critic on Mon, 2024-11-04 15:17

Being older meets the description of (not more than 10 years younger), therefore an older beneficiary is an EDB who can stretch RMDs over their life expectancy. The 10 year rule does not apply.

Further, if the owner passed on or after their RBD, the older beneficiary can use the longer life expectancy of the decedent rather than their own shorter life expectancy.

Submitted by rosalyn malin on Fri, 2024-11-08 16:07

If the older sibling is an EDB, what chart would she use to determine the RMD from the inherited IRA?

Since  the beneficiary is OLDER  and the deceased had already started taking RMDs, and since the beneficiary has to take RMDs, it seems to me that the IRA would be depleted in less than 10 years.  Does such a beneficiary have a choice as to whether she wants to use the 10 year rule or not?

Submitted by Alan - IRA critic on Sat, 2024-11-09 14:51

The single life table (Table I) applies. The divisor is determined by using the age the decedent would have attained in the year of death and subtracting 1.0 from that divisor for the first RMD year, 2.0 for the second RMD year etc.

There is no option for using the 10 year rule when the decedent passes post RBD.

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