Non EDB and inherited Roth given July 2024 final regulation
My daughters inherited Roths from their grandmother 3 years ago. She was 101. They were planning to just let them grow until the end of the 10 year payout period. Does the new 7/18/24 final Secure Act regulation now require them to take RMDs before 10 years?
Similarly, assuming no law changes, based on the July regulation, if they inherit my Roths (I am now 74) will they need to take annual RMD or just do a payout by 10 years?
My understanding is that in both cases they would not be an eligible designated beneficiary.
Thanks
Permalink Submitted by Alan - IRA critic on Mon, 2024-08-05 13:42
They are not EDBs, but because all Roth owners are treated as passing prior to their RBD (there is no RBD), there are no required annual RMDs in years 1-9 of the 10 year rule. They can wait and take a lump sum distribution at the end of the 10th year, and it will be tax free.