Non-EDB inherits annuitized IRA

Submitted by Robert Vashko on Tue, 2022-10-04 19:55

Mom (67) annuitizes her IRA for a 20-year period certain (assume that her L.E. is more than 20 years).

Mom dies one year later, naming her non-EDB daughter as sole bene.

I seem to recall SECURE making it plain that an IRA bene could not buy an annuitized payout as an “end run” around the 10-year rule. But I don’t think the act or the proposed regs touched upon the above scenario – inheriting an already-annuitized IRA.

Does Daughter get a 19-year payout, or must the annuitization schedule be recalculated by the custodian down to 10 years or less?



Submitted by Alan - IRA critic on Wed, 2022-10-05 00:33

Did Mom annuitize prior to 2020? If so, the Secure Act does not affect beneficiary payouts.

Submitted by Robert Vashko on Wed, 2022-10-05 13:01

Let’s say post-SECURE. 

Submitted by Alan - IRA critic on Thu, 2022-10-06 02:31

  • I cannot locate anything definitive in the proposed Regs. However, the following is copied from p 57 of those Regs, hinting at payment acceleration in order to comply with the 10 year rule:
  •  “In addition, to facilitate compliance, these proposed regulations provide a third exception that allows an annuity contract to provide an acceleration of payments that is required to comply with section 401(a)(9)(H). “

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