Eligible Designated Beneficiary – less than 10 years younger
The “not more than 10 years younger” exception to SECURE’s out-in-10 rule has been described in the mainstream media as primarily applying to “younger siblings”.
While I agree that siblings are probably the most likely “suspects” for this particular category of eligible designated beneficiary (and I know the bene doesn’t have to be a sibling or any relation at all), I have been interpreting this exception as likewise applying to benes who are *older* than the decedent IRA owner. Am I correct on that?
Older benes are, by definition, “not more than 10 years younger” than the decedent. But I am not sure if the statutory language is meant to be interpreted as the exception applying only to younger beneficiaries who are within 10 years of age of the decedent. If that distinction makes sense?
Permalink Submitted by Alan - IRA critic on Fri, 2020-02-07 01:22
Yes, an individual beneficiary is an EDB if they are not more than 10 years younger, and that includes those 1-10 years younger, the same age, or older than the decedent. Those who are older than the decedent statistically have fewer years remaining than the decedent did, so when they inherit the IRA will be distributed considerably faster than if the decedent continued to live due to the higher age and the much faster distribution under the single life table. For beneficiaries over age 80, the distribution period is less than 10 years.