Spouse inheriting an Inherited IRA and Roth IRA
My client (62) inherited an inherited IRA and an inherited Roth IRA from her husband (62). He had inherited these accounts from his mother in 2022. What are her options with these accounts? And is this discussed in any of the newsletter issues so that I may reference it somewhere? Thanks for your help.
Permalink Submitted by Alan - IRA critic on Thu, 2024-06-06 23:55
You might look for the phrase “successor beneficiary” as that is what the client is. A successor beneficiary must continue the RMD schedule of the original (designated) beneficiary, her husband. Husband inherited in 2022 after the Secure Act and was subject to the 10 year rule so client must drain these no later than the end of 2032. She does not get another 10 years. Also, the age of the successor beneficiary is immaterial as the 10 year rule applies. It’s a new 10 year rule if the original owner passed prior to 2020, but in this case of death after 2019, the husband’s 10 year rule will apply to the client.
However, husband’s mother probably passed after her RBD and if so husband had to take annual beneficiary RMDs (which were waived only through 2024 by the IRS) from the TIRA, but they will have to resume to client in 2025. It’s possible that these annual beneficiary RMDs would drain the account prior to 2032, and if so the TIRA will not last until 2032. The inherited Roth on the other hand will have no annual RMDs, just the 10 year rule.
This scenario covers so many different proposed Regs for the Secure Act spread through 250 pages of disjointed rules, I could not possibly provide citations for all of them.