Original Beneficiary
Minor Child
Was the minor child a disabled or chronically ill person as of the date of the Deceased Account Owner’s death?
YES
- Beneficiary is Deceased Account Owner’s Minor Child
- Minor child is a disabled or chronically ill person as of the date of the Deceased Account Owner’s death
What RMD
Rules Apply?
Life Expectancy of Minor Child
RMDs based on minor child’s single life expectancy determined the year following the year of the Deceased Account Owner’s death, reduced by 1 for each subsequent year.
Are Annual
Withdrawals Required?
Yes
Annual RMDs required and must begin by December 31 of the year following the year of the Deceased Account Owner’s death. Subsequent RMDs must be taken by December 31 each year.
When Must the Account
be Fully Liquidated?
End of Life Expectancy
By December 31 of the year in which the disabled minor child’s life expectancy is 1 year or less. A Successor Beneficiary should be named.
Notes:
- These rules apply only if the beneficiary was a disabled person as of the date of the Deceased Account Owner’s death, and the required documentation was provided to the IRA custodian by October 31 of the year after death.
- A Successor Beneficiary is the individual named by the Original Beneficiary to inherit any remaining IRA balance after their death.
NO
- Beneficiary is Deceased Account Owner’s Minor Child
- Minor child is not a disabled or chronically ill person as of the date of the Deceased Account Owner’s death
What RMD
Rules Apply?
Life Expectancy of Minor Child
RMDs based on minor child’s single life expectancy determined the year following the year of the Deceased Account Owner’s death, reduced by 1 for each subsequent year.
Are Annual
Withdrawals Required?
Yes
Annual RMDs required and must begin by December 31 of the year following the year of the Deceased Account Owner’s death. Subsequent RMDs must be taken by December 31 each year.
When Must the Account
be Fully Liquidated?
End of Year of Child’s 31st Birthday
By December 31 of the year the child reaches age 31. A Successor Beneficiary should be named.
Notes:
- These rules are the same if the Deceased Account Owner died before, on, or after their RBD.
- A Successor Beneficiary is the individual named by the Original Beneficiary to inherit any remaining IRA balance after their death.
Expand for the definition of Required Beginning Date
Account Owner’s Required Beginning Date
The IRA Account Owner’s Required Beginning Date, or RBD, is April 1 of the calendar year following the calendar year in which the Account Owner attains their Applicable Required Minimum Distribution (RMD) Age. The Account Owner’s applicable RMD age differs depending on when the Account Owner was born, which is reflected in the table below.
| Date of Birth | Applicable RMD Age |
| Before July 1, 1949 | 70½ |
| On or after July 1, 1949 to December 31, 1950 | 72 |
| On or after January 1, 1951 to December 31, 1959 | 73 |
| On or after January 1, 1960 | 75 |
Source:
Internal Revenue Code §401(a)(9)(C)(i)
Expand for the definition of deceased Account Owner’s Minor Child
Minor Child of Deceased Account Owner
For purposes of determining required minimum distributions from an inherited IRA, a minor child is a child, stepchild, adopted child, and eligible foster child of the deceased Account Owner and who is under age 21 as of the date of the Account Owner’s death. Also, an “eligible foster child” means an individual who is placed with the taxpayer by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. Minor grandchildren, nieces, nephews, or any other minors generally do not qualify as “a minor child of the deceased Account Owner.”
Sources:
Treas. Reg. §§1.401(a)(9)-4(e)(1)(ii) and 1.401(a)(9)-4(e)(3)
Expand for the definition of Spousal Rollover
Spousal Rollover
For purposes of determining required minimum distributions from an inherited IRA, the surviving spouse of the deceased Account Owner has an option that is not available to non-spouse beneficiaries: a spousal rollover.
A spousal rollover is an election to treat the deceased Account Owner’s IRA as the surviving spouse’s IRA, an election that may be made at any time after the Account Owner’s death. With this election, the inherited IRA is redesignated as an IRA in the name of the spouse as IRA owner rather than as beneficiary. As the name implies, this option is unique to a surviving spouse beneficiary.
To elect a spousal rollover, the surviving spouse must be the sole primary beneficiary of the deceased Account Owner’s IRA – a determination that is made by September 30 of the year following the Account Owner’s death. Also, the surviving spouse must have an unlimited right to withdraw amounts from the IRA.
A spousal rollover may be a suitable option if the surviving spouse does not require distributions from the account for current living expenses and prefers to defer distributions (and resulting income tax consequences) for a longer period of time.
Sources:
Internal Revenue Code §408(d)(3) and Treas. Reg. §1.408-8
Expand for the definition of Disabled Person Under Age 18
Person Under Age 18 with a Disability
For purposes of determining required minimum distributions from an inherited IRA, a person under age 18 is considered disabled if they have a medically determinable physical or mental impairment that results in marked and severe functional limitations and that can be expected to result in death or to be of long-continued and indefinite duration.
If a beneficiary is determined to be disabled by the Social Security Commissioner, they are deemed to be disabled for inherited IRA required distribution purposes.
Documentation proving the disability, such as a certification from a licensed health care practitioner, must be provided to the IRA custodian no later than October 31 of the calendar year following the calendar year of the deceased Account Owner’s death.
Source:
Treas. Reg. §1.401(a)(9)-4(e)(4)
Expand for the definition of Disabled Person Age 18+
Person Age 18 and Older with a Disability
For purposes of determining required minimum distributions from an inherited IRA, a person age 18 and older is considered disabled if they are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration.
If a beneficiary is determined to be disabled by the Social Security Commissioner, they are deemed to be disabled for inherited IRA required distribution purposes.
Documentation proving the disability, such as a certification from a licensed health care practitioner, must be provided to the IRA custodian no later than October 31 of the calendar year following the calendar year of the deceased Account Owner’s death.
Source:
Treas. Reg. §1.401(a)(9)-4(e)(4)
Expand for the definition of Chronically Ill Person
Chronically Ill Person
For purposes of determining required minimum distributions from an inherited IRA, a chronically ill person is any individual certified by a licensed health care practitioner within the preceding 12 months as:
1. Being unable to perform (without substantial assistance from another individual) at least 2 activities of daily living for a period of at least 90 days due to a loss of functional capacity. The activities of daily living are eating, toileting, transferring, bathing, dressing, and continence.
OR
2. Requiring substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment.
Documentation proving the chronic illness, such as a certification from a licensed health care practitioner, must be provided to the IRA custodian no later than October 31 of the calendar year following the calendar year of the deceased Account Owner’s death.
Source:
Treas. Reg. §1.401(a)(9)-4(e)(5)
This information is not intended as tax or legal advice and is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code. Each taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor. Please encourage your clienst to consult with their attorney or accountant prior to acting upon any of the information contained herein.
National Life Group® is a trade name of National Life Insurance Company, Montpelier, VT, Life Insurance Company of the Southwest, Addison, TX, and their affiliates. Each company of National Life Group is solely responsible for its own financial condition and contractual obligations. Life Insurance Company of the Southwest is not an authorized insurer in New York and does not conduct insurance business in New York. This document may not be copied, transmitted, or otherwise disseminated in any way without the express written permission of National Life Group. The companies of National Life Group® and their representatives do not offer tax or legal advice. Please encourage your clients to consult with their appropriate professional advisor.
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TC8652397(0126)1 | Cat No 108306(0126)