Successor Beneficiary IRA RMD rules

Submitted by Ryan Kenney on Wed, 2022-12-07 16:49

We have a client that inherited an IRA from her brother (under age 72) in 2021 that was originally inherited by him from their dad (who was over RMD age) in 2011. With this in mind, she is considered a successor beneficiary and subject to the 10 year rule. The question that we have is since the Dad was originally over RMD age when he passed and the son originally inherited in 2011 as a stretch RMD Bene IRA, is our client also subject to the RMD rule each year along with the 10 yr rule. Similar to if someone inherits an IRA from their parent directly who was older than RMD age (after 2020).

Thank you!



Submitted by Alan - IRA critic on Wed, 2022-12-07 17:34

  • Per the IRS proposed Secure Act Regs, if the original owner passed after their RBD, a successor beneficiary will be subject to both the 10 year rule and annual RMDs in years 1-9. Those annual RMDs would be a continuation of brother’s RMD schedule reducing the divisors that would have been used by him by 1.0 each year. These annual RMDs will eliminate a large lump sum distribution in year 10 so they might be beneficial.
  • Client was responsible for completing brother’s 2021 beneficiary RMD if brother did not before passing.
  • With new RMD tables effective in 2022, client must “reset” brother’s divisors to reflect what they would have been had the new tables applied all along. This is done by determining brother’s age in 2012 and the single life table divisor from the new tables, then reducing that divisor by 10.0 to reflect the 10 years since 2012. This is a one time inconvenience, but will slightly reduce client’s 2022 and future RMDs. As a successor beneficiary client’s age is irrelevant.

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