Successor bene and the 10-year rule

Submitted by William Cass on Thu, 2020-02-13 14:36

I’ve seen some conflicting information from experts on this question so it may be one of those where Treasury will eventually provide clarification, appreciate your take on this.

Designated beneficiary subject to the 10-year rule dies after year 4 with funds still remaining in the inherited IRA. Does the successor beneficiary (of original designated bene) continue the “existing” 10-year clock and have 6 years left to distribute the remaining funds? Or, does the 10-year clock “reset” for the successor beneficiary? Intuitively I would think the successor would continue the initial 10-year clock and have 6 years left, but I’ve heard other experts interpreting this differently.



Submitted by Alan - IRA critic on Thu, 2020-02-13 14:44

  • Not aware of any direct guidance, but if the 10 year rule is handled consistently with prior law regarding the 5 year rule, the successor gets no reset and has 6 years remaining. This would also be the case whether the successor otherwise qualified as an EDB or not.
  • For participant deaths pre Secure, when the designated beneficiary passes after 2019, the successor becomes subject to a new 10 year rule.
  • But if the account has already been inherited twice prior to 2020, when the current successor passes the successor to the successor is not subject to the 10 year rule, but must continue with the RMD schedule that currently applies to the successor beneficiary. 

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