Grandfathered Beneficiary Rules
If an IRA owner or other retirement plan participant died before 2020, his designated beneficiary is generally “grandfathered” from the new more stringent required minimum distribution (RMD) regime imposed by the SECURE law (2019). The designated beneficiary of the pre-2020 decedent can take RMDs over his own life expectancy no matter how long it is and regardless of whether he would qualify as an “eligible designated beneficiary” (EDB) under post-SECURE rules.
Death of Grandfathered Beneficiary
But what happens when that “grandfathered” designated beneficiary dies before his “life expectancy” runs out? What RMD rules apply to his successor beneficiary(ies)?
SECURE has an answer: The grandfathered original designated beneficiary is treated as an “eligible designated beneficiary,” so his life expectancy payout continues after his death for his successor beneficiary—but not for more than 10 years.
For more information – see Reg. § 1.401(a)(9)-1(b)(2) et al.
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