post-SECURE bene inheriting IRA already in RMD phase

Submitted by Robert Vashko on Mon, 2020-05-11 17:08

Son inherits Dad’s IRA in March of 2020. Dad was 78 when he died, roughly seven years into his RMD phase.

Does Son still have the option, post-SECURE, to continue taking Dad’s RMDs on Dad’s remaining life expectancy? Or is Son locked into out-in-10 regardless of whether Dad had been taking RMDs when he died?

Granted, at age 78, Dad’s remaining RMD schedule may not be much better than out-in-10 anyway, but still good to know the options.

Please and thank you.

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Permalink Submitted by Alan - IRA critic on Mon, 2020-05-11 18:16

According to Natalie Choate, the Secure Act itself states the 10 year rule will apply. However, what is not clear is the IRS stance on the prior IRS Reg that included a “longer than” option for the beneficiary. The following is quoted from her article on Secure.
“What is now up in the air is the following. Under pre-SECURE rules, IRS regulations stepped on the Code’s strict and bare-bones rules by providing that, if the participant died after his required beginning date leaving benefits to a DB, the payout period for the DB would be the “longer of” the life expectancy of the DB or the life expectancy of the participant. Reg. § 1.401(a)(9)-5, A-5(a)(1). This sensible rule prevented a DB who was older than the deceased participant from having a shorter payout period than the nonDB who inherited from the same decedent. Now SECURE has “stepped on” the language of this regulation, so (until the Treasury issues guidance on SECURE) it is not clear whether this “longer of” rule will apply post-SECURE. “