Post Secure Act RMD Question
Hello,
A client passed in 2020 and was 75 years old when she passed. Her son was the only beneficiary and would have been on the 10 year rule and with the RMD’s be waived from 2021 to 2024. He has now passed away but there are no beneficiaries on file so this would be going to an ESTATE BDA.
Are we able to confirm if this would be a continuation of the original 10 year stretch or since it is moving to a BDA-ESTATE would the options be different?
Thank you.
Permalink Submitted by Alan - IRA critic on Mon, 2024-08-12 12:06
The estate as successor beneficiary is subject to the same rules as if there was an individual successor beneficiary. Therefore, starting in 2025, the estate will have the same RMD that the son would have had, and those calculations would continue until the 10 years expire in 2030.
But the executor would likely want to close the estate within a few months and that would result in a lump sum distribution to the estate, or possibly the executor could assign the inherited IRA out of the estate to the will beneficiaries or intestate beneficiaries who would also be subject to these same annual RMDs and 10 year rule, but a total distribution to the estate would be avoided and it could be closed.