Pre-Secure Act double inherited IRA BDA
Hello, I have a client (Phil) who inherited an IRA from his mother who passed away in 1996 (age 75). Client starting taking RMD’s in 2017 age 53 (33.4 LE factor). My client passed in 2025 and there are 3 beneficiaries listed 2 non-spouse and one for a special needs trust.
Would the RMD in years 1 – 9 be based on Phil’s life expectancy and are there any different rules for the special needs trust or would that fall under the 10 year rule as well?
Thank you.
Permalink Submitted by Kevin O'Hearn on Wed, 2025-05-14 15:54
Sorry the third beneficiary is a special needs trust for a minor. Thank you.
Permalink Submitted by Alan - IRA critic on Wed, 2025-05-14 17:20
The two non spouse beneficiaries and the SNT all get the same successor beneficiary treatment. Starting in 2026 they must each continue to take annual beneficiary RMDs continuing the schedule based on client’s age, therefore the 2026 divisor will be 24.4. The 10 year rule also applies and the inherited IRAs must be drained by the end of 2035.
The three successor beneficiaries should be able to have their shares transferred into 3 separate inherited IRA accounts, and for 2025 if client did not complete the RMD before passing, the 3 are responsible for completing that RMD in any combination. The deadline for that is the end of 2026.