IRA without named beneficiary

Submitted by Matt Muzic on Thu, 2016-10-13 20:28

In an article by Beverly DeVeny, “There is No Beneficiary on the Retirement Account: Now What?”, posted on January 9, 2014, she mentions that when you inherit an IRA through an estate, meaning that the IRA did not name a beneficiary, you cannot use the beneficiary’s life expectancy. Instead, “you can stretch distributions over the ACCOUNT OWNER’S remaining life expectancy.

Also, Ed Slott mentioned this in an article for LifeHealthPro, on June 26, 2015. He wrote “They will be stuck taking distributions over the deceased IRA owner’s remaining life, had he lived.” He was referring to the person who inherits the IRA.

My question is this: Where can I find out more about this? Is this in the IRS code somewhere? If some one could point me in the right direction, I would greatly appreciate it.



Submitted by Alan - IRA critic on Thu, 2016-10-13 20:43

Yes, this is included in IRS RMD Reg 1.401(a)(9)-5 Q 5 and Pub 590 B. However, to further clarify, the distribution period depends on WHEN the IRA owner passed. If IRA owner passed prior to his required beginning date and left the IRA to his estate, the 5 year rule applies. Only when the owner passes on or after the required beginning date would the remaining life expectancy of the owner apply to inherited IRA RMDs.  For both acticles check to see if the age of the IRA owner upon death was mentioned, as it should have been.

Submitted by Matt Muzic on Thu, 2016-10-13 20:52

Wow, thank you for the fast response. The decedent passed at 79 years old, which gives him a better life expectancy than the 5 year default rule – because he died after 70.5 years old, right? Where can I find the appropriate chart to determine his expectency. Again, thank you very much for your help.

Submitted by Alan - IRA critic on Thu, 2016-10-13 22:32

  • See p 43 of Pub 590 B attached:     https://www.irs.gov/pub/irs-pdf/p590b.pdf?_ga=1.196823020.1347689568.1458248194
  • First, the remainder of the decedent’s year of death RMD must be completed if the decedent did not complete it before passing. The Uniform Table (Table III) is used for that and the age is the age that the decedent would have reached at the end of the year in which they passed.
  • Beneficiary RMDs must start by the end of the year following the year of death using the link above. Enter the table using the age the decedent would have reached at the end of the death year to get the divisor. For example, if that age would have been 79 the divisor is 10.8. But the first beneficiary RMD year is the year following the year of death, and for that year and each year thereafter reduce the 10.8 by 1.0. The divisor for the first beneficiary year is therefore 9.8, the next year 8.8 etc etc. So you only have to look at the table for the first year to get the year of death divisor and no need to check the table again.

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