Post RBD Death
Louise died a few weeks ago at age 80. Her 53 y.o. daughter is her primary heir. Since Louise’s death occurred after her RBD, does her daughter have the choice to elect a 10-year versus continuing RMDs using an 80 year old’s life expectancy, or is she required to continue her mother’s RMD schedule?
Permalink Submitted by Alan - IRA critic on Thu, 2022-04-21 20:42
Her daughter will be subject to the 10 year rule, but will also have to take annual life expectancy RMDs using her single life expectancy based on her age in 2023 according to the proposed Secure Act Regs because Louise passed after her RBD. Her daughter is also responsible for completing the 2022 year of death RMD if Louise did not complete it. The portion regarding annual LE RMDs for daughter could change since this is a controversial provision in the proposed Regs. Re verify after the Regs are final.
Permalink Submitted by Bob Foland on Thu, 2022-04-21 22:26
It sounds as if the daughter has two requirements: 1) to continue her mother’s RMD schedule, and 2) to have all of the funds distributed in ten years. Is that correct? If so, it means that she will have annual RMDs but will also need to be mindful of getting the IRA fully distributed by the end of the tenth year following Louise’s death. Yes?
Permalink Submitted by Norman Cook on Thu, 2022-04-21 23:18
(1) I Think (?) the life expection table to use is the daughter not the mother.)
Permalink Submitted by Alan - IRA critic on Thu, 2022-04-21 23:38
No, daughter does not continue Louise’s RMD schedule. She starts beneficiary RMDs using her own life expectancy for her age in 2023, then drains the account by the end of 2032 under the 10 year rule. Separately, she also needs to complete Louise’s RMD for 2022 if Louise did not.