Question:
Hi,
My last remaining parent, my mother, passed away in May 2017, and my younger brother and I inherited her IRA (equally split into inherited IRA accounts). We were of the understanding we could handle required minimum distributions (RMDs) via the “stretch IRA” method (RMDs spread out over our expected lifetime). The new laws that went into place in 2020 and 2022 have us wondering if we must change what we are doing. Can you please help us with this question?
Regards,
Eric
Answer:
Hi Eric,
The changes made by the SECURE Act apply only to the beneficiaries of IRA owners who died after 2019. Since your mother died in 2017, you and your brother can continue stretching required minimum distributions (RMDs) under the rules in effect before the SECURE Act.
Question:
Dear Mr. Slott,
I am trying to ascertain whether annual RMDs are required for inherited IRAs. In my case, I am sole beneficiary and not disabled. My mother passed away in March 2020 and had begun RMD withdrawals across all her IRAs. I am age 67.
Thank you,
Tim
Answer:
Hi Tim,
You are considered a “non-eligible designated beneficiary.” Therefore, you must empty your mother’s account by 12/31/30 – the end of the 10th following the year of her death. In 2022, the IRS said that non-eligible designated beneficiaries of IRA owners who died after RMDs started also must receive annual RMDs during years 1-9 of the 10-year period. However, since then the IRS has waived the annual RMD requirement for 2021, 2022 and 2023. So, you aren’t required to take RMDs for those years. Keep checking the Slott Report to see whether 2024 annual RMDs are also waived.
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