IRS Final Regs on Missed Year-of-Death RMDs

by Prof. Robert Bloink and Prof. William H. Byrnes

The IRS’ final regulations governing post-SECURE Act RMDs provide clarity in many areas when it comes to inherited retirement accounts. One section of the regulations addresses the complicated issues that can arise when a retirement account owner dies without yet taking their required minimum distribution (RMD) for the year. Under prior law, the rule wasn’t completely clear in situations involving multiple account beneficiaries or multiple accounts. The new regulations offer important clarity for beneficiaries who must take the decedent’s final RMD—albeit also providing rules that can be complex and potentially controversial. These new rules are important to beneficiaries across-the-board, regardless of whether they must take annual RMDs during the 10-year distribution period. They should also be considered by current account owners who are considering the timing of their current-year RMDs.

Multiple Beneficiaries and Multiple Accounts: Unpacking the New Rules