Options following SECURE Act

Submitted by Richard Stumpf on Tue, 2020-01-21 20:55

Client died on Dec 26, 2019. Had a large IRA. Multiple beneficiaries, all named individuals.

Since client died in 2019, stretch still applies, correct?

And each bene gets to choose stretch vs cash out vs 5 year option?

One bene pre-deceased mom, account was set up per stirpes, do contingent bene’s get the same stretch options?

Thanks.



Submitted by Alan - IRA critic on Tue, 2020-01-21 23:10

Yes, old stretch rules apply allowing the life expectancy stretch including the contingent beneficiaries. For each to use their own life expectancy, separate inherited IRAs need to be established by 12/31/2020. The 5 year rule is only an option if client passed prior to RBD, and even then would not be beneficial in other than a unique set of circumstances.

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