Double Inherited IRA BDA
Hello, I have a client (61 years old) who inherited an IRA BDA from his spouse who passed away in 2024 (age 61 and was disabled). The wife inherited the IRA BDA from her father who passed in 2023 at age 92.
Since the spouse was disabled what would be the options for the husband who has the double inherited IRA BDA? 10 year rule with RMD payments in year 2 thru 9 passed on the wife’s life expectancy?
Any feedback would be greatly appreciated.
Permalink Submitted by Alan - IRA critic on Mon, 2025-03-24 11:43
Yes.
Client is a successor beneficiary. His spouse was an EDB due to disability, and was able to stretch her inherited IRA using her single life expectancy. Client must continue those RMDs, reducing what would have been her divisor by 1.0 each year. In addition, client is also subject to the 10 year rule, and whatever balance is left in the inherited IRA must be drained by the end of 2034.
Had wife not been an EDB, she would have been subject to the 10 year rule ending in 2033, but would have been taking LE RMDs in years 1-9. When she passed client would have had to continue those annual RMDs, but would have had to drain the account in 2033 rather than in 2034.
Another slight difference here is that the IRS waived the beneficiary RMDs in 2023 and 2024 for 10 year rule beneficiaries but did not waive EDB RMDs. Therefore, client is responsible for completing wife’s 2024 year of death RMD if she did not do so prior to passing. Deadline for that is 12/31/2025.