Inherited IRA
In 2019, my client Frank, passed away.
His cousin, Lisa, inherited his IRA.
In 2020, Lisa passed away.
Her husband, Rob, inherited the IRA.
They are all the same age.
Do distributions fall under the 2020 rule or the 2019 rule?
One of the exceptions to the 2020 rule is if the beneficiary is not more than 10 years younger than the original IRA owner, and Rob is not. So, are distributions based on life expectancy?
Permalink Submitted by Alan - IRA critic on Fri, 2021-01-22 17:21
No. The Secure Act states that a pre Secure designated beneficiary who passes after 2019 triggers the 10 year rule for the successor beneficiary, so Rob is not subject to annual RMDs but he must drain the inherited IRA by 12/31/2030. In some cases, this 10 year rule will provide a longer distribution period than the amount of years left of the designated beneficiary’s distribution period.
Also, because all 2020 RMDs were waived, Lisa could not have an uncompleted year of death RMD that Rob would be responsible for.