Successor Bene IRA, spouse original beneficiary, life expectancy calculation and 10 year rule
Successor Bene IRA details
Original IRA Owner
DOB 5/1922
DOD 5/1996 (74 years old)
First Beneficiary: Spouse of IRA owner
DOB 11/1938
Age 58 in 1996 when original IRA owner died
DOD 2/2024
Successor Beneficiary: Non-spouse
First question – does the life expectancy factor re-calculate each year since first beneficiary was spouse? Or is the life expectancy factor reduced by 1 each year?
- If re-calculated, then the life expectancy factor this year is 7.1.
- If reduced by 1 each year, then the factor this year is 1.
Second question – how does the 10-year rule fit into this scenario?
Thank you!
Permalink Submitted by Alan - IRA critic on Tue, 2025-03-18 14:01
Is this another example of a sole surviving spouse failing to assume ownership of the inherited IRA? Even if the spouse continued as the beneficiary, with it’s much higher RMDs, if the spouse failed to take the full beneficiary RMD in any year starting in 1997, they would have defaulted to ownership status which would make the current beneficiary a designated beneficiary rather than a successor beneficiary.
If the spouse did in fact complete all beneficiary RMDs and never assumed ownership, the successor beneficiary would have to continue the RMD schedule of the spouse but would have to reduce the divisor by 1.0 each year starting in 2025 (6.6 divisor). Therefore, the final year for recalculation of the divisor was 2024. The inherited IRA would be drained in about 7 years and would therefore not last the full 10 years of the 10 year rule.
Conversely, if the spouse was deemed to be the owner of the IRA that could have used the Uniform Table, the age of the non spouse beneficiary would apply to determine annual RMDs in years 1-9 of the 10 year rule. This assumes that the non spouse is not an EDB.
It is surprising how many surviving spouses never assume ownership of the inherited IRA, subjecting them to higher single life table RMDs, and making their beneficiary a successor beneficiary, although the 10 year rule has already reduced the stretch period for applicable designated (not successor) beneficiaries.