Successor Beneficiary Rules
The son of a gentleman who passed away in December of 2021, is listed as the beneficiary on an inherited IRA. The original owner – which was his grandmother, his father’s mother – passed away in 2014 and listed his father as the beneficiary. So, are the new 10-year distribution rules applicable for the grandson, or is it subject to the former lifetime inherited payout rules- based on his father’s life expectancy?
Permalink Submitted by Alan - IRA critic on Sat, 2022-01-08 03:56
The grandson is the successor beneficiary to a pre Secure Act designated beneficiary. The Secure Act states that such successor beneficiaries are subject to the 10 year rule, therefore grandson will have no RMDs for 2022-2030, but will have to drain the inherited IRA by 12/31/2031. The grandson is also responsible for completing his father’s 2021 beneficiary RMD if his father did not complete it.
Permalink Submitted by Rene Nourse on Sat, 2022-01-08 05:43
OK – the father did take his RMD, so now the successor beneficiary- grandson who is in his mid 30’s- will need to take distributions by end of 2031. Ok, will let him know.