Successor IRA

Submitted by Chad Boaz on Wed, 2018-05-23 20:20

I am trying find the factor for the beneficial owner of a beneficial IRA (I believe it is called a successor IRA). It is my understanding that the factor reduces by 1 every year for the successor owner, but I’m not sure what the factor was for the 1st beneficial owner at their time of death.

Original Owner
DOB – 10/03/1935
DOD – 05/05/2012

1st Beneficial Owner (Spouse)
DOB – 02/25/1934
DOD – 02/25/2017

2nd Beneficial Owner
DOB – 02/17/1958

Any help would be appreciated!



Submitted by Alan - IRA critic on Wed, 2018-05-23 21:08

  • Based on the ages of the owner and designated beneficiary (spouse), the surviving spouse SHOULD have assumed ownership of the inherited IRA. It would lower RMDs considerably and it also would have allowed the successor beneficiary to become a designated beneficiary, because then the 2nd beneficial owner would be treated as the 1st beneficial owner of the surviving spouse. Note that there is a default rule that states if the sole surviving spouse beneficiary by the end of any year fails to take the full beneficiary RMD, they automatically are treated as the owner of the IRA. That would allow the 2nd beneficial owner to get a much longer stretch. 
  • Now to your question. Assuming the surviving spouse took beneficiary RMDs until they passed (2013-2017) and never assumed ownership or defaulted to ownership. 1st beneficial owner divisor would be 8.6 for 2017 (actual table divisor applies for sole surviving spouse), then for 2018 the 2nd beneficial owner must start 1.0 reductions each year, so 7.6 for 2018, 6.6 for 2019 etc. However, if the surviving spouse had become the owner, then the 2nd beneficial owner would have a much higher divisor of 25.2 for 2018 and RMD would be less than a third of what it is if 2nd owner was a successor beneficiary (inherited from beneficiary rather than from owner).
  • Therefore, current surviving beneficiary should check to see if perhaps surviving spouse in one of those years failed to take their full RMD as beneficiary and defaulted to ownership even though the account was never retitled.

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