IRA RMD
Sister owned an IRA. She passed away in 2023 at age 74 (born in 1949).
Her sole beneficiary was her brother (Brother #1). He was 71 in 2023 (born in 1952). So the brother was an Eligible Designated Beneficiary and was taking RMDs over his LE (Starting with his LE factor in 2024 and -1 in years 2025+).
Brother #1 just passed away in August 2025 and left the remaining balance in the inherited IRA to Brother #2 (75%) and a Niece (25%).
Questions:
- Do Brother #2 and the Niece now use the 10 year rule?
- Do the annual RMDs of Brother #2 and Niece start in 2026?
- What annual RMDs are Brother #2 and the Niece required to take? i.e. What LE factor do they use to calculate their RMDs for 2026, 2027, …?
- Do Brother #2 and the Niece need to complete the 2025 RMD for Brother #1?
- Does it matter how Brother #2 and the Niece split the 2025 RMD?
Thank you in advance for your help.
Bob Wright
Permalink Submitted by Alan - IRA critic on Tue, 2025-08-26 10:31
Q 1 -Yes, the successor beneficiaries are subject to the 10 year rule, ending in 2035.
Q 2 -Yes, their RMDs start in 2026.
Q 3 – The 2026-2034 annual RMDs are the same as what brother #1 would have had to take, continuing to reduce that divisor by 1.0 each year, then drain the accounts in 2035. The successor beneficiary ages are irrelevant.
Q 4 -Yes, if brother did not complete his 2025 year of death RMD before passing, the successor beneficiaries must complete it. While they have until the end of 2026 to do so, if they do not complete it this year, there will be two years of RMDs due in 2026.
Q 5- No, the successors can split the year of death RMD in any portions they wish. Of course, that will take coordination between them.
Permalink Submitted by Robert Wright on Tue, 2025-08-26 10:41
Thank you Alan.
Permalink Submitted by Robert Wright on Tue, 2025-08-26 11:36
Alan,
Are ALL successor beneficiaries subject to the 10 year rule; whether they inherit from an Eligible Designated Beneficiary or a non-Eligible Designated Beneficiary?
Bob Wright