Death Benefit Options

After the death of an owner of an IRA, what are the options for a non-spousal beneficiary?



  • If the IRA owned passed after RMDs had begun, the non spouse beneficiary who is not an EDB (eligible designated beneficiary) is subject to the 10 year rule with annual RMDs in years 1-9. The beneficiary can take out more anytime, but not less than the RMD. If the beneficiary is an EDB (spouse, not more than 10 years younger, disabled, et al) the 10 year rule does not apply, just life expectancy RMDs until the account is drained.
  • If owner passed prior to RMDs, a non EDB beneficiary is subject to the 10 year rule, but no annual RMDs. An EDB must take annual RMDs but no 10 year rule, but also has the option to opt out of EDB treatment and into the 10 year rule, with no annual RMDs in years 1-9.  Usually its best to not opt out of EDB treatment.

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