Non designated beneficiary (estate) vs Eligible Designated Beneficiary
If the beneficiary of an inherited IRA is the estate, but one of the beneficiaries who ultimately receives the funds is an EDB… does it matter if they are an EDB or are they just required to take RMDs based on original owner’s life expectancy (owner died after RBD)?
IRS language only provides an explanation saying Secure Act changes only apply to individual beneficiaries which makes it seem like RMDs would be taken based on original owner’s age.
Permalink Submitted by Alan - IRA critic on Fri, 2023-03-24 15:42
Yes, that’s right. Once the estate inherits the IRA, the RMD for deaths after the RBD is based on the decedent’s life expectancy, even if the executor is able to assign the inherited IRA out of the estate to the estate beneficiary. That beneficiary would not qualify as an EDB, where the “D” indicates a designated beneficiary. There could be an exception for surviving spouse estate beneficiaries, as there are been many PLRs allowing the spouse to do the spousal rollover to their own IRA. A PLR may or may not be required for such spouse depending on the IRA custodian.