Beneficiary of Beneficiary IRA
Hello,
I have a new client who has a beneficiary IRA from her brother who passed away before his required beginning date at age 50 in 2021. He actually inherited the beneficiary IRA from his mom who passed away in 2011 at the age of 69.
What is the required withdrawal schedule for and or does this beneficiary IRA account follow the 10 year withdrawal rule?
Hope I gave enough information!
Permalink Submitted by Alan - IRA critic on Tue, 2025-04-29 16:42
The client will be subject to the 10 year rule, meaning that the inherited IRA must be drained by the end of 2031.
Client also must continue the RMD schedule used by her brother, which was based on brother’s attained age in 2012. The applicable divisor must be reduced by 1.0 for each year, the same as if brother was still living. Client’s beneficiary RMDs were waived by the IRS for 2022-2024 but must resume in 2025. Finally, if brother did not complete his 2021 RMD before passing, the client was responsible for completing that RMD in 2021.
Permalink Submitted by BruceM on Wed, 2025-04-30 13:21
Alan. A follow-up question on this.
Yes, I understand the requirement the successor beneficiary must continue the withdrawal rate of the original beneficiary, subtracting 1 from each year that began with the life expectancy of the original beneficiary in the year following the year of the original owner’s death. But does the SECURE Act require successor beneficiaries, regardless of age difference to the original beneficiary, be subject to the 10 year rule? Is this because of the age difference of the successor to the original IRA owner….or is it simply the 10 year rule now applies to all who became successors after 2019?
Thanks