SECURE ACT treatment of Parent as beneficiary
Would parent beneficiaries be treated as Eligible Designated Beneficiary under the “be less than 10 years younger” rule? I can’t find any discussion of this and would think by definition, if one is older, they would be “less than 10 years younger”. If not, are parents as beneficiaries then required to take under the 10 year rule? thanks -m
Permalink Submitted by Alan - IRA critic on Tue, 2021-04-06 17:52
Yes, since parents would be less than 10 younger, they would be EDBs eligible for the stretch. Further, new IRS Pub 590 B indicates that if the owner passed PRIOR TO RBD, EDBs can opt into the 10 year rule. This was not evident from Secure Act text. It means if the plan owner passes under 72 and parent is upwards of mid 80s, the parent could opt out of short LE RMDs into the 10 year rule and avoid beneficiary RMDs in any particular year until year 10.