Successor Beneficiary

Submitted by Wendy Mommaerts on Tue, 2020-11-24 15:07

We have a client who inherited her husbands IRA and kept it in a bene IRA. The wife now passed away in 2020 and left her bene IRA to her daughter. I’m assuming we no longer need to worry about “successor bene IRA” where the daughter will need to follow her mother’s RMD schedule? The daughter will need to empty her new bene IRA w/in 10 yrs?



Submitted by Alan - IRA critic on Tue, 2020-11-24 16:16

Yes, the 10 year rule will apply. This is true even if mother defaulted to ownership by not completely distributing the beneficiary RMD and the daughter therefore would be a designated (not successor) beneficiary, the 10 year rule would still apply for daughter.

Submitted by Wendy Mommaerts on Tue, 2022-09-13 18:59

The original IRA owner passed in 2013. Spouse kept this account as a bene IRA and began RMDs in 2014. The beneficiary passed away in 2020, does the successor beneficiary need to continue the RMD schedule of the 1st beneficiary or do they start their own for years 1-9?Also, does the successor bene have to empty the bene IRA by 2023 or will they have their own 10yr schedule.

Submitted by Alan - IRA critic on Tue, 2022-09-13 19:08

They need to continue the RMD schedule of the designated beneficiary (wife), except that the 1.0 annual divisor reduction will apply for 2021-2029. Age of successor beneficiary is not a factor. The 10 year rule also applies to the successor beneficiary, therefore mother’s RMD schedule continues (with 1.0 reduction) for 2021-2029, but the account must be drained in 2030, the end of the 10 year period.

Submitted by Wendy Mommaerts on Tue, 2022-09-13 19:17

If the IRA owner (age 76) would have passed in 2020 and the bene, sister passed in 2021 (age 77 not more than 10yrs younger), would the successor bene have to follow the sister’s RMD schedule and empty the IRA by 2030?Same situation above except the individuals are husb and wife? Is there ever a situation where a successor bene would have to empty the IRA by the 10th yr of the IRA owners death?

Submitted by Alan - IRA critic on Tue, 2022-09-13 20:54

  • I edited by prior post to make it clearer that annual RMDs AND the 10 year rule apply to the daughter. 
  • With respect to the EDB sister beneficiary example, the successor beneficiary would be subject to the 10 year rule ending on 12/31/2031. For years 1-9 (2022-2030) the successor beneficiary would have to complete sister’s RMD schedule.
  • Yes, there is a case where a successor beneficiary would have to drain the inherited IRA 10 years from the year of owner’s death. That would occur when the designated beneficiary is not an EDB (eg a child), and is subject to the 10 year rule. If that designated beneficiary (already under the 10 year rule) passes, there is no new 10 year rule or life expectancy and the successor beneficiary is subject to that same 10 year period as the designated beneficiary. In the prior examples, the original beneficiaries were EDBs and therefore NOT subject to the 10 year rule, and in those cases the successor receives 10 years from beneficiary’s death.

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