IRA Beneficiary Options for Deaths On or After January 1, 2020
The distribution options available to IRA beneficiaries depend first on whether the IRA owner died before, or on or after January 1, 2020.
If on or after January 1, 2020, the distribution options then depend on whether the beneficiary is an “eligible designated beneficiary,” a “designated beneficiary,” or a “nonperson beneficiary.”
An “eligible designated beneficiary” is the IRA owner’s spouse, the IRA owner’s minor child, a disabled individual, a chronically ill individual, or an individual who is not more than 10 years younger than the IRA owner.
A “designated beneficiary” is an individual that is not an eligible designated beneficiary.
A “nonperson beneficiary” is a beneficiary that is not an individual (e.g., an estate or a charity).
Whether the IRA owner died before, or on or after his required minimum distribution (RMD) beginning date (RBD)—or if the IRA is a Roth IRA—only makes a difference if the beneficiary is a nonperson beneficiary, as shown below.
NOTE: Minor children must disburse under the 10-year rule once they reach the age of majority (which hasn’t been defined). There are special rules for certain applicable multi-beneficiary trusts for disabled or chronically ill beneficiaries and for certain annuities.
