SECURE Act and eligible designated beneficiary
I am looking for further clarification on one of the eligible designated beneficiary exceptions to the 10 year rule. If an IRA is left to a twin sibling or a sibling that is 2 years older than the original account owner, would they also be considered a designated eligible beneficiary?
Permalink Submitted by Alan - IRA critic on Sat, 2020-02-01 14:47
Yes. An eligible beneficiary is defined as being “not more than 10 years younger than the employee (IRA owner)”. This includes all those older than the IRA owner.
Permalink Submitted by James Kidney on Sun, 2020-02-02 13:32
Thank you Alan. I know that’s the language in the text of the SECURE Act, but I haven’t seen or read a further explanation of this anwhere. Thanks for the clarification.
Permalink Submitted by James Kidney on Sun, 2020-02-02 13:35
So one further question- will any beneficiary that is older than the original account owner be considered an eligible designated beneficiary or do they have to be within 10 years of age (either older or younger)?
Permalink Submitted by David Mertz on Sun, 2020-02-02 14:55
Don’t read more into the statute than is there. § 401(a)(9)(E)(ii)(V) divides beneficiaries into those who are more than 10 years younger than the decedent and those who are not. Any beneficiary who is older than the decedent is in the latter group, a beneficiary who is not more than 10 years younger.
Permalink Submitted by James Kidney on Mon, 2020-02-03 12:35
Thanks for the clarification