Type II – Applicable Multi-Beneficiary Trust
In a Type II AMBT, where no beneficiary is entitled to IRA distributions until the disabled or chronically ill beneficiary is deceased, what is the distribution rule for the remaining beneficiaries when the D/CI beneficiary dies? 10 years from the date of the D/CI’s death? If it is after the IRA owner’s RBD, would distributions for years 1-9 be required based on the oldest non D/CI’s life expectancy?
Permalink Submitted by Alan - IRA critic on Thu, 2022-09-22 23:01
Upon the death of the disabled beneficiary, the 10 year rule is applied to the IRA balance. There are no annual RMDs if the IRA owner passed after RBD. If the IRA owner passed post RBD, and the proposed Secure Act Regs are adopted as submitted, annual RMDs would continue in years 1-9 under the remaining deceased disabled beneficiary’s RMD schedule. The ages of the remaining trust beneficiaries would not be material. This is the same RMD treatment that would occur with no trust beneficiary, only an EDB who passed with a successor beneficiary and RMDs would be required to continue during years 1-9 of the 10 year rule to the successor beneficiary.