Age of Majority for Minor Child of Beneficiary IRA Pre 2020
I have a client who inherited a Pre-tax IRA from his mother (who passed in December 2019). At the time, the age of majority in New York was 18 and he was 15. Now that he turned 18, am I reading correctly that the Secure Act changed the age of majority to 21 for all states, or was that only for those who inherited a Pre-tax IRA from a decedent who passed after 1/1/2020? I was also reading something about an age of termination, which I couldn’t quite follow.
Would appreciate any feedback at all. Thank you.
Permalink Submitted by Alan - IRA critic on Thu, 2023-01-05 17:49
The Secure Act does not affect client because he inherited prior to 2020. He gets a full LE stretch. If mother had passed after 2019, client could only have stretched until age 21, and the following year the 10 year rule would kick in and the inherited IRA would have had to be drained by his age 31. Client therefore gets more favorable treatment than he would have had under the Secure Act rules.
Permalink Submitted by Clinton Kane on Thu, 2023-01-05 20:33
Alan, thank you so much for the response. Do you know if the child has to re-register the account into their name now that they are 18, or would they have to wait until 21? Thanks again.