Inherited Beneficiary IRA
Original IRA owner passed in 2009, and a divorced/ex-spouse was the beneficiary taking stretch RMDs since inheriting the Bene IRA. The new beneficiary is the new widow. My understanding is that the post SECURE Act rules will take over, and the new beneficiary will be subject to the 10 year rule based on the original beneficiary’s date of birth. Also, the titling of the account will now reflect BIRA FBO new widow B/O first beneficiary.
Is this correct?
Permalink Submitted by Alan - IRA critic on Wed, 2024-08-28 14:09
While the successor beneficiary will be subject to the 10 year rule, the RMD schedule of the ex spouse must be continued as if the ex spouse was still living. Therefore, the inherited IRA may not last 10 years, but if it does it will have to be totally distributed by the end of year 10 after the successor inherited. The new widow cannot assume ownership of the inherited IRA since they are a successor beneficiary.
Some custodians can only show two names in an inherited IRA title. If so, the original owner’s name is the one that is dropped.