By Sarah Brenner, JD
Director of Retirement Education

QUESTION:

Does the SECURE Act’s 10-year rule apply to inherited Roth IRAs?

ANSWER:

Yes, the SECURE Act’s 10-year rule also applies to inherited Roth IRAs for non-eligible designated beneficiaries (NEDBs). That means most nonspouse Roth IRA beneficiaries will have ten years to empty an inherited Roth account. On the other hand, eligible designated beneficiaries (EDBs) of Roth IRAs have the option to choose lifetime stretch required minimum distributions (RMDs) on their inherited Roth IRA.

QUESTION:

I have several IRAs. To keep things simple for my children after I die, is it better to put these IRAs into my trust? Thanks

Lisa

ANSWER:

Hi Lisa,

It is not possible to put your IRAs into a trust during your lifetime. That would result in a full distribution. The “I” in IRA stands for individual, and these accounts must be owned by the individual while they are alive. It is possible, however, to name a trust as your IRA beneficiary. That said, the rules for IRA trust beneficiaries can be complicated. Simplicity would not be guaranteed for your children if you name a trust as your IRA beneficiary.

If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.

https://irahelp.com/does-the-secure-acts-10-year-rule-apply-to-inherited-roth-iras-todays-slott-report-mailbag/