Inherited IRA and Special Needs Trust

Submitted by Eleonora Tomasello on Thu, 2023-10-19 17:00

Here are the details:

IRA owned by Mary’s beneficiary – her brother Bob
Mary dies in early 2023
Now Bob has an Inherited IRA -beneficiaries Alice, Robert, and John’s SNT (terminally ill)
Bob dies in the middle of 2023

My questions are:
Can the SNT use John’s life to distribute his RMD’?
Alice and Robert would have 10 years to distribute the account, correct?
If you have multiple Inherited IRA’s from different owners, each one is required to distribute its own RMD and you cannot withdraw the RMD out of one account or combine it with a Traditional IRA RMD, Correct?

The titling for the Inherited IRA for Alice should be something like

Alice Moore inherited the IRA Bene of Mary Stewart

Thank you



Submitted by Alan - IRA critic on Thu, 2023-10-19 22:52

  • Since Bob was the designated beneficiary of Mary, all the others are successor beneficiaries including the SNT. All separate inherited IRAs must be drained by the end of 2033.
  • In addition, annual beneficiary RMDs in years 1-9 will be required if Mary passed after her RBD. Those annual RMDs are calculated using Bob’s age in 2024 or Mary’s age in 2023 if Bob was more than 1 year older than Mary.  If Bob was older, please advise as there are more complications to the rules.
  • If Bob’s executor were to disclaim, the SNT (only) would be able to stretch the RMDs based on the age of the disabled EDB.

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