Successor IRA Beneficiary
My client passed in 2024 at age 63. She had an Inherited IRA from her mom, who passed in 2018; therefore, my client was taking distributions based on her life expectancy via stretch. Her husband, age 64, is successor beneficiary of the Inherited IRA. As an eligible designated beneficiary, is he now subject to the 10-year rule or can he continue the stretch? Does he continue with his late wife’s distribution schedule or are the distributions now based on his life expectancy?
Permalink Submitted by Alan - IRA critic on Tue, 2024-09-10 12:51
Husband is not an EDB because an EDB is an eligible designated beneficiary designated by the account owner. Husband was not the beneficiary of the owner, he is a successor beneficiary and must continue the RMD schedule of his wife and is also subject to the 10 year rule. His own age is irrelevant. Therefore, he must continue his wife’s annual RMDs in years 1-9 (divisor reduces by 1.0 each year) and then drain the inherited IRA by the end of 2034. If his wife did not complete her 2024 beneficiary RMD before passing, husband must complete that RMD as well.
Note that the inherited IRA divisors should have been reset in 2022 to reflect the new RMD tables. You might want to check if this was done. The new tables would reduce the RMDs by a small amount, around 6%.